RR No. 19-2021: Implements the tax incentives and exemption provisions of RA No. 11321 (Sagip Saka Act)

Key points

1. Income Tax exemption. An Accredited Farmers and Fisherfolk Enterprise may be exempt from Income Tax on income directly arising from its operations if it is registered as a Barangay Micro-Business Enterprise (BMBE). The exemption applies only during the period of BMBE registration with a Certificate of Authority from the Department of Trade and Industry.
2. Criteria for the exemption. The enterprise must be among the intended beneficiaries listed in Section 5 of the IRR of RA No. 11321. Its total assets, including those from loans but excluding the land for its office, plant and equipment, must not exceed ₱3,000,000.00, subject to revision by the proper agency or council.
3. Donor’s Tax exemption. Donations of real and personal property to an accredited enterprise are exempt if the donee is certified by the Department of Agriculture as accredited and as a proponent group or beneficiary of the Farmers and Fisherfolk Enterprise Development Program. The donation must also be for accomplishing that program.
4. Application. The application follows RMO No. 9-2014 and is filed with the Law and Legislative Division, Room 709, 7th Floor, BIR National Office, Diliman, Quezon City. Required documents are the Department of Agriculture certifications, TINs of donor and donee, the notarized Deed of Donation, and the title and tax declaration or proof of receipt.
5. Deductibility. Such donations are deductible from the donor’s gross income only under the ordinary rules of Section 34 (H) of the Tax Code.

Who is affected

• Accredited Farmers and Fisherfolk Enterprises
• Donors to accredited farmers and fisherfolk enterprises

Deadlines and effectivity

• Income Tax exemption applies during the BMBE registration period