How to Report Crypto Income in the Philippines: Your 2024 Tax Guide

The Essential Guide to Reporting Cryptocurrency Income in the Philippines

With cryptocurrency adoption surging in the Philippines, the Bureau of Internal Revenue (BIR) has made it clear: crypto earnings are taxable. Failure to report digital asset income can lead to audits, penalties, or legal consequences. This comprehensive guide breaks down exactly how Filipino taxpayers should declare cryptocurrency earnings, ensuring full compliance with BIR regulations. Whether you’re trading, mining, or earning crypto through freelancing, understanding these rules protects you from costly mistakes.

Who Must Report Crypto Income in the Philippines?

The BIR requires all Philippine tax residents to declare cryptocurrency-derived income, including:

• Crypto Traders: Individuals regularly buying/selling digital assets
• Miners: Those earning tokens through blockchain validation
• Freelancers & Remote Workers: Professionals paid in cryptocurrency
• Investors: Individuals earning staking rewards, airdrops, or interest
• Businesses: Companies accepting crypto payments

Even occasional crypto earnings must be reported if they exceed the minimum taxable income threshold (currently ₱250,000 annually).

Types of Crypto Income Subject to Tax

Philippine tax law treats different crypto activities as distinct income categories:

• Capital Gains: Profits from selling crypto held as investments (taxed at 15% on net gains above ₱100,000)
• Ordinary Income: Trading profits, mining rewards, staking income, and freelance crypto payments (taxed at graduated rates up to 35%)
• Business Income: Crypto received for goods/services (taxed as business profit)

Step-by-Step Guide to Reporting Crypto Taxes

1. Register with BIR (If Not Already Registered)

• Obtain TIN (Tax Identification Number)
• Register as self-employed/professional if trading crypto actively
• Secure official receipts for business-related crypto transactions

2. Calculate Your Taxable Income

• Track every transaction: Use tools like Koinly or Accointing to log buys/sells
• Determine cost basis: Original purchase price + transaction fees
• Convert to PHP: Use BIR-approved exchange rates at transaction time
• Deduct allowable expenses: Trading fees, mining equipment, and software costs

3. File the Correct Tax Forms

• BIR Form 1701A: For self-employed individuals (quarterly income tax)
• BIR Form 1701: Annual income tax return for professionals/traders
• BIR Form 1700: For employees with supplemental crypto income
• Capital Gains Tax Return: For one-off investment disposals

4. Pay Taxes Due

• Deadlines: April 15 (annual), with quarterly installments
• Payment options: Authorized agent banks, GCash, or BIR ePayment channels

Record-Keeping Requirements

Maintain these documents for 3 years:

• Transaction histories from exchanges
• Wallet addresses and transfer logs
• Receipts for crypto-related expenses
• Screenshots of PHP conversion rates at transaction time
• Printed copies of filed tax returns

Penalties for Non-Compliance

Failure to report crypto income may result in:

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

Pro Tips for Crypto Taxpayers

• Use P2P exchange receipts as proof of PHP valuations
• Separate personal holdings from trading assets
• Consult a BIR-accredited tax practitioner for complex cases
• File even if you incurred losses to establish reporting history

FAQs: Reporting Crypto Taxes in the Philippines

Do I pay taxes on crypto-to-crypto trades?

Yes. Every trade is a taxable event. You must calculate PHP gains when swapping tokens.

How is mined cryptocurrency taxed?

Mining rewards are taxed as ordinary income at PHP value when received. Equipment costs are deductible expenses.

What if I hold crypto long-term?

Holding assets isn’t taxed, but selling triggers capital gains tax if profits exceed ₱100,000.

Can I deduct crypto losses?

Yes, capital losses offset capital gains. Ordinary losses reduce taxable income (limit: ₱100,000 annually).

Is Binance P2P income reportable?

Absolutely. All earnings from P2P trading must be declared as business or professional income.

How does BIR track crypto transactions?

Through bank linkages, third-party reports, and blockchain analysis tools. Assume all transactions are visible.

Disclaimer: Tax regulations evolve. Consult the official BIR website or a tax professional for current requirements.