MANILA, Philippines — The Bureau of Internal Revenue (BIR) proposed that the earnings obtained through cryptocurrency-based gaming platforms like Axie Infinity and other similar games should be subjected to income tax.
BIR Deputy Commissioner for Legal Group Marissa Cabreros explained, “Ang serbisyo ng paglalaro, diyan kayo binabayaran ng income. Nabibigyan kayo ng benefits o currency na ginagamit o tini-trade ninyo to convert into money at nagagamit pambayad.”
“At the end of the day may flow of income na pumasok sa ating players so income din po ‘yan na pupuwede pong maging taxable,” she added.
BIR Deputy Commissioner Cabreros also explained if a player’s annual salary does not exceed P250,000, he will not be charged income tax, based on the existing provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
The Department of Finance (DOF) Undersecretary Antonette C. Tionko further states that crypto gaming-based platforms must pay income taxes on such transactions.
The Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) are still discussing whether “Axie” is a currency or a security, according to Tionko.
“But regardless of how it is characterized, it’s taxable, subject to income tax,” Tionko said.
Sky Mavis, the Vietnamese game developer behind Axie Infinity asserts that the company’s income derived from sources in the Philippines should be taxed locally, despite it is a non-resident foreign business based in Vietnam.
Tionko said, “That is one of the things that we hopefully capture once we have that system of registration for non-residents, those types of companies not in the Philippines.”
Tionko reminded the public that the “principle of taxation is the flow of wealth.”
What is Axie Infinity
Axie Infinity is an online adventure game created by Sky Mavisa, a Vietnamese studio. It is a blockchain game that has grown in popularity in the country as a result of the pandemic. It allows players to earn in-game cryptocurrency, which can then be traded and converted to pesos.
However, in order to play the game, users must first purchase three digital creatures known as “Axies,” which they will breed to create avatars who will fight on the battlefield. The rewards for completing the combat are cryptocurrency.
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