The Department of Finance (DOF) has said that cryptocurrency games, usually referred to as online play-to-earn games, such as Axie Infinity, are subject to income tax.
Based on the report of Manila Bulletin, DOF Undersecretary Antonette C. Tionko said that earnings from gaming platforms such as Axie Infinity, which allow players to generate profits, are subject to income tax.
Usec. Tionko also revealed that the DOF and the Internal Revenue (BIR) are looking into Axie Infinity. Although the game’s developer Sky Mavis, is based in Vietnam, Tionko noted that any revenue generated in the Philippines should be taxed locally.
Moreover, Finance Undersecretary admitted that the “characterization” regarding whether the digital pets “Axie” is a currency or security remains undecided by the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP). However, she added that “Axie” is subject to income tax regardless of how it is characterized.
The crypto game Axie Infinity is developed by Vietnam startup Sky Mavis, launched in 2018 using the Ethereum blockchain but has recently switched to its own Ronin technology.
It is a cryptocurrency blockchain-based trading and battling game in the combined style of Pokemon and Animal Crossing, adopting a play-to-earn model. Axie Infinity allows players to earn income through NFTS (non-fungible tokens) and cryptocurrencies by breeding, battling, and trading token-based digital pets called “Axies.”
A team of three Axies used to cost only around USD 5 (around PHP 250), but due to the upward trend of the virtual game, its price has skyrocketed to around USD 1,000 (roughly PHP 50,000).
The game is available on Windows PC, Mac, and iOS but is primarily played on Android, with APK files distributed via side-loading.
Featured Image credits: axie.substack.com
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