How to Pay Taxes on Crypto Income in the Philippines: 2024 Guide

Understanding Crypto Taxation in the Philippines

The Philippines has seen explosive growth in cryptocurrency adoption, but many investors remain confused about tax obligations. The Bureau of Internal Revenue (BIR) classifies crypto as taxable property, not currency. This means profits from crypto activities are subject to income tax under the National Internal Revenue Code. With the BIR increasing scrutiny on digital assets, understanding how to legally report and pay taxes on crypto income is crucial to avoid penalties.

Is Cryptocurrency Taxable in the Philippines?

Yes. According to BIR Revenue Memorandum Circular No. 102-2021, cryptocurrencies fall under “other taxable income” and are subject to:

• Income Tax: Applied to profits from trading, mining, or selling crypto
• Capital Gains Tax (CGT): 15% on gains from crypto classified as capital assets
• Value-Added Tax (VAT): Exempt for financial services, but may apply to crypto sold as goods

The BIR requires all crypto earnings to be declared in annual tax returns (BIR Form 1701 or 1701A).

Types of Taxable Crypto Activities

You must report income from these common crypto events:

1. Trading Profits: Gains from buying low and selling high on exchanges like PDAX or Binance
2. Crypto Mining: Rewards received are taxable at fair market value when earned
3. Staking/Yield Farming: Generated tokens count as ordinary income
4. NFT Sales: Profits from non-fungible token transactions
5. Airdrops & Forks: Free crypto received is taxable upon receipt
6. Crypto Payments: Income from goods/services paid in crypto

Step-by-Step Guide to Filing Crypto Taxes

Follow this process to remain compliant:

1. Track All Transactions: Use tools like Koinly or Accointing to log buys/sells with timestamps and PHP values
2. Calculate Gains/Losses: Apply FIFO (First-In-First-Out) method for cost basis calculation
3. Classify Income Type: Determine if earnings qualify as business income (graduated 0-35% tax) or capital gains (flat 15%)
4. File BIR Form 1701: Report annual income including crypto profits by April 15th
5. Pay Through eFPS: Use the BIR’s Electronic Filing and Payment System for remittance

Record-Keeping Requirements

Maintain these documents for 3 years:

• Exchange transaction histories
• Wallet addresses and transfer records
• Receipts for crypto purchases
• Screenshots of market prices at transaction time
• Calculations of capital gains/losses

Penalties for Non-Compliance

Failure to report crypto income may result in:

• 25-50% surcharge on unpaid taxes
• 12-20% annual interest charges
• Criminal charges for tax evasion (up to 10 years imprisonment)
• Asset freezing through BIR’s Run After Tax Evaders program

Frequently Asked Questions

Do I pay taxes if I hold crypto without selling?

No. Taxes apply only when you dispose of crypto through selling, trading, or spending. Unrealized gains aren’t taxed.

How does BIR track cryptocurrency transactions?

The BIR collaborates with exchanges under SEC regulation, uses blockchain analysis tools, and reviews bank transfers. Since 2022, exchanges must report large transactions.

Are losses deductible?

Yes. Capital losses can offset capital gains in the same tax year. Unused losses may be carried forward for three years.

Is peer-to-peer (P2P) trading taxable?

Absolutely. All crypto-to-fiat or crypto-to-crypto trades are taxable events regardless of platform. Track P2P values using BSP exchange rates.

What if I earn less than ₱250,000 annually?

You’re exempt from income tax but must still file a return. Crypto profits count toward this threshold.

Can I pay crypto taxes with cryptocurrency?

No. The BIR only accepts Philippine peso payments through authorized channels like banks or eFPS.

Staying Compliant in 2024

With the BIR expanding crypto tax enforcement, consult a certified tax accountant specializing in digital assets. Use tax software to automate calculations, and always declare income honestly. Proper compliance protects you from penalties while supporting the growth of the Philippines’ digital economy.