Players who generate income from the online game Axie Infinity are subject to pay taxes, the Department of Finance (DOF) said.
Antonette Tionko, DOF undersecretary, said the DOF as well as the Bureau of Internal Revenue (BIR) are already looking into the game which was developed by Vietnamese studio Sky Mavis.
“We looked into it and the BIR looked into it, and they’ve sent a report,” Tionko said in a recent virtual briefing.
“Certainly whoever earns currency from it, its income, you should report it,” she added.
According to a report recently released by CNBC, people in the Philippines are earning income through non-fungible token and cryptocurrencies by breeding, battling and trading these digital pets called axies.
The report published in May said people in the Philippines have found these video games as a way to earn amid the challenges bought by the pandemic-induced lockdown.
Tionko said the developer of the game is a non-resident foreign corporation.
“It is not registered in the Philippines. That is one of the things that we hopefully capture once we have that system of registration for non-residents, those types of companies,” Tionko said.
She also pointed out that cryptocurrency is an asset, thus it is already taxable in the Philippines.
“Now, what kind of tax applies? Well, certainly, the gains are subject to income tax. 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 Commission) and the BSP (BangkoSentral ng Pilipinas) to decide on. Is it a security? Is it a currency?” Tionko said.
“So those are the things that will help us define the rules on how it should be taxed. But regardless of how it is characterized, it’s taxable, subject to income tax,” she added. — Angela Celis
