Axie Infinity Players Must Pay Taxes on Their Profits, Says the Philippines

The Philippines’ Department of Finance (DOF) has issued a notice requiring people who earn profits through games like Axie Infinity to be taxed, even if they are Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term or non-fungible tokens (NFTs). According to the Inquirer, these earnings must be taxed as incomes.

“Whoever earns currency from it, it’s income you should report it. (…) Cryptocurrency is an asset, so it’s already taxable in the Philippines. What kind of tax applies? Certainly, the gains are subject to income tax,” Antonette Tionko, Finance Undersecretary, noted. Regardless of the kind of money earned through these play-to-earn games, the authority pointed out that these transactions are taxable under the country’s law.

“But, if you look at the nitty-gritty of it, a lot of it really basically will depend on its characterization, which I think is something for the SEC [Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission] and the BSP [Bangko Sentral ng Pilipinas] to decide on,” she commented. She added that although there is an ongoing discussion on whether cryptos should be considered as currencies or securities, “certainly the gains are subject to income tax.”

Crypto Incomes Taxation

However, she clarified that buying tokens to play such games will not be taxable under the rulings. “Remember the principle of taxation: it’s a flow of wealth. So buying isn’t a flow of wealth. Maybe it’s taxable to them if you bought it at a discount, but then it’s getting into the nitty-gritty of it,” Tionko stated.

The country has not been active recently in crypto regulations, although their central bank has been showing some interest in the industry. In fact, in 2019, the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, was doubtful to launch its own digital currency and stated that it would continue to monitor digital currencies closely. Early that year, the central bank released a regulatory framework to oversee the market activities relating to virtual currencies.