THE Bureau of Internal Revenue (BIR) said those earning from cryptocurrency-based game Axie Infinity, even the so-called scholars who earn from playing other people's accounts, must register with the bureau and pay their corresponding income taxes.

BIR Deputy Commissioner for Legal Group Marissa O. Cabreros said on Tuesday that the recently issued Revenue Memorandum Circular (RMC) 97-2021, which reminded social media influencers of their tax obligations, also covered those earning from cryptocurrency-based games like Axie Infinity.

"Sakop din po sila ng RMC 97-2021 kasi ang tinutukoy doon lahat ng activities, lahat po ng serbisyo na ang ginagamit mo [They are also covered by RMC 97-2021 because it refers to all the activities, all the services that you use] is online or via digital platform," Cabreros said in an interview during a public briefing.

"Lahat po ng kumbaga nasa mundong iyon ay kailangan mag-report at magbayad ng buwis," she added. [Everyone in that world has to report and pay taxes.] "The company that is providing the platform for it to happen, the players, lahat po yung kung ano man ang tawag sa kanila. [all of them, whatever they are called].

Cabreros further said that at the end of the day, whether they are called "scholars" or "breeders," the question is if they are earning from the activities.

"If yes, [you need to register] and just go a BIR office where you are a resident."

In the play-to-earn game Axie Infinity developed by Vietnam-based Sky Mavis Pte. Ltd, players can earn cryptocurrency token "Smooth Love Potion," which can be sold in exchange for cash.  In its website, it said the game has attracted many players from developing countries as it provides a new income stream during the Covid-19 pandemic.

Scholars in Axie Infinity are those who are hired by other users to play on their behalf under a shared profit agreement. The scholarship program is allowed by the game developers.

Meanwhile, breeders refer to those who breed Axies—Pokemon-inspired creatures used by the players in the game—and sell it in the marketplace.

Cabreros also said that not only individuals but also corporations are also required to register and pay their taxes from earning from these games.

"Normally ang mga players po naglalaro mga individual but, reminder: hindi lang po individual ang tinutukoy dito pati corporate entity kasali kasi we were told na may mga corporations na pumapasok sa ganitong digital activities," she said. [Normally the players are individuals but, reminder: not only individuals are referred to here but also corporate entities because we were told that there are corporations that participate in such digital activities.]

Nonetheless, Cabreros said they have made it easier for taxpayers amid the pandemic to register online with BIR through the agency's new business registration portal.

BIR Deputy Commissioner Arnel SD. Guballa earlier told the BusinessMirror that earnings from cryptocurrency-based games can also be subjected to value-added tax (VAT) apart from income tax.

But under Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (Train) law, those with annual taxable income that does not exceed P250,000 are exempted from paying personal income tax.

The Train law also provided that gross annual sales and/or receipts earned from the sale or lease of goods or properties or the performance of services not exceeding P3 million are also exempted from VAT.

Guballa earlier said the bureau will also be studying whether the taxes will be imposed upon earning the cryptocurrency token or upon exchanging it to cash.

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