{

“title”: “How to Report Crypto Income in the Philippines: Your 2024 Tax Guide”,
“content”: “

Introduction: Navigating Crypto Taxes in the Philippines

With cryptocurrency adoption soaring in the Philippines, understanding how to report crypto income is crucial for investors, traders, and miners. The Bureau of Internal Revenue (BIR) classifies crypto as taxable property, meaning profits from trading, mining, or receiving crypto payments must be declared. Failure to comply can lead to penalties. This guide breaks down the process step-by-step, helping you stay compliant with Philippine tax laws while maximizing your returns.

Is Cryptocurrency Taxable in the Philippines?

Yes! The BIR clarified in Revenue Memorandum Circular (RMC) No. 102-2021 that cryptocurrencies are subject to tax. Whether you’re trading on platforms like Binance, earning from play-to-earn games like Axie Infinity, or mining Bitcoin, your gains are treated as taxable income. Key principles include:

• Capital Gains Tax (CGT): 15% on profits from selling crypto held as an investment.
• Regular Income Tax: For active traders or miners—rates range from 0% to 35% based on income brackets.
• Value-Added Tax (VAT): Currently exempt for crypto-to-fiat transactions but applies to goods/services paid with crypto.

Types of Crypto Income and How They’re Taxed

Not all crypto earnings are taxed the same. Here’s a breakdown:

• Trading Profits: Gains from buying low and selling high are subject to CGT if held as capital assets. For frequent traders, it’s business income taxed progressively.
• Mining Rewards: Treated as ordinary income based on crypto’s fair market value when received.
• Staking/Yield Farming: Rewards are taxable income at the time they’re earned.
• Crypto Payments: If you receive crypto for services (e.g., freelancing), it’s income taxed at your marginal rate.
• Airdrops/Hard Forks: Taxable as “other income” upon receipt.

Step-by-Step Guide to Reporting Crypto Income

Follow these steps to ensure compliance:

1. Register with BIR: If trading is your primary income source, register as a self-employed professional using BIR Form 1901.
2. Track All Transactions: Use tools like Koinly or Accointing to log buys, sells, transfers, and fees. Export records from exchanges (e.g., PDAX, Coins.ph).
3. Calculate Gains/Losses: For trades: Selling Price – Cost Basis (purchase price + fees) = Taxable Gain. For mining/staking: Use PHP value at reward receipt.
4. File Taxes Annually: Use BIR Form 1701 (for self-employed) or 1700 (employed with side crypto income). Include crypto earnings under “Business Income” or “Other Income.”
5. Pay Taxes Due: Settle payments via authorized banks or ePay channels before April 15th each year.

Essential Documents and Records to Keep

Maintain these for 3 years (BIR requirement):

• Exchange transaction histories (CSV/PDF)
• Wallet addresses and transfer proofs
• Receipts for mining hardware or operational costs (deductible for businesses)
• Market price records (e.g., Bangko Sentral ng Pilipinas reference rates)
• BIR registration certificates and previous tax returns

Penalties for Not Reporting Crypto Income

Non-compliance risks severe consequences:

• 25-50% Surcharge on unpaid taxes
• 12-20% Annual Interest on overdue amounts
• Criminal Charges: Tax evasion under the Tax Code (up to 10 years imprisonment)
• Audits: BIR can subpoena exchange records under RMC 102-2021

Pro Tips for Stress-Free Crypto Tax Compliance

• Use crypto tax software to automate calculations.
• Set aside 15-35% of profits for taxes (store in stablecoins or PHP).
• Consult a BIR-accredited tax accountant specializing in crypto.
• Declare losses to offset gains (e.g., net trading losses reduce taxable income).
• File even with minimal income—it builds compliance history.

Frequently Asked Questions (FAQ)

Q: Do I need to report crypto if I only have small earnings?
A: Yes! The BIR requires reporting all income, regardless of amount. Small earnings may fall under the 8% preferential tax rate if registered as self-employed.

Q: How is crypto taxed if I’m just holding (HODLing)?
A: No tax applies until you sell, trade, or spend it. Gains upon disposal are taxable.

Q: What if I receive crypto as payment for freelance work?
A: It’s ordinary income. Report the PHP equivalent value at receipt date on BIR Form 1701.

Q: Are NFTs taxed in the Philippines?
A: Yes—treated like crypto. Profits from NFT sales are subject to CGT or income tax.

Q: Can I deduct crypto losses?
A: Only if you’re a registered trader/business. Personal investment losses aren’t deductible.

Stay proactive with crypto taxes to avoid penalties. When in doubt, seek guidance from the BIR or a certified tax professional.

”
}