Next up on the tax train: Your ‘Axie Infinity’ prizes

By: 3 years ago

Choo choo, internet earners, welcome to the tax train. While YouTubers and influencers are now onboard thanks to an official memorandum, it seems that the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) have another passenger in sight: play-to-earn games.

Now that NFTs are a major thing in every nook and corner of the world wide web, the government is getting in on the action, too. One bit of cryptocurrency earning their attention are blockchain games like the Vietnamese-developed “Axie Infinity,” where users are able to earn real money just by playing it.

According to Finance Undersecretary Antonette C. Tionko, games such as this are subject to income tax, just as most online money-making schemes are. In “Axie Infinity,” players compete in battles with digital pets they’ve bred dubbed as “Axies.” Battle rewards are basically in-game cryptocurrencies, which can then be exchanged for real pesos. (Think of it as “Pokémon,” but with actual money.)

“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,” Tionko said.

Despite the taxable nature of “Axie Infinity,” Tionko mentioned that the creator isn’t registered with the BIR, given that developer Sky Mavis is a foreign corporation. Nonetheless, the company’s income from the country should still be covered by local taxes, according to DOF.

“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. It’s not in the Philippines, but certainly whoever earns currency from it, you should report it,” Tionko said.

Of course, this isn’t the first time our interweb entertainment has gotten the T-word, if we can recall the infamous “Netflix tax.” We, like any other taxpayer, just hope it’s put to good use.

Screenshot from “Axie Infinity”