How to Report Crypto Income in Philippines: Complete Tax Guide 2024

Understanding Crypto Taxation in the Philippines

The Bureau of Internal Revenue (BIR) classifies cryptocurrency as taxable property under Revenue Memorandum Circular No. 102-2021. Whether you’re trading Bitcoin, earning from NFTs, or receiving crypto payments, you must declare profits to avoid penalties. Non-compliance risks 25% late payment fees, 20% deficiency interest, and even criminal charges under the Tax Code. With the BIR intensifying crypto tax enforcement through blockchain analytics, proper reporting is non-negotiable for Filipino investors.

Types of Crypto Income and Tax Treatments

1. Trading Profits: Capital gains from selling crypto are taxed at:

• 0-20% capital gains tax if held as investment
• Regular income tax rates (up to 35%) if traded frequently as business income

2. Mining Rewards: Treated as ordinary income at progressive rates (5-35%) based on annual earnings.

3. Staking/Yield Farming: Rewards taxed as ordinary income upon receipt.

4. NFT Sales: Subject to 6-12% capital gains tax depending on holding period.

5. Crypto Payments: Freelancers and businesses must include crypto earnings in gross income calculations.

Step-by-Step Guide to Reporting Crypto Income

1. Calculate Total Gains: Track all transactions using tools like Koinly or CoinTracker. Include:
   • Acquisition costs
   • Fair market value at transaction time (PHP equivalent)
   • Exchange fees
2. Classify Income Type: Determine if earnings qualify as capital gains or ordinary income.
3. File Required Forms:
   • BIR Form 1701 (Annual Income Tax Return) for individuals
   • BIR Form 1702 for corporations
   • Attach Schedule of Digital Asset Transactions
4. Pay Taxes: Settle dues by April 15th annually via Authorized Agent Banks or ePayment channels.
5. Keep Records: Maintain transaction logs, wallet addresses, and exchange statements for 3 years.

Common Crypto Tax Mistakes to Avoid

• Ignoring Small Transactions: All crypto-to-crypto trades are taxable events
• Forgetting Cost Basis: Failing to deduct acquisition costs inflates tax liability
• Miscalculating Fair Value: Always use Bangko Sentral ng Pilipinas (BSP) exchange rates on transaction date
• Missing Deadlines: Late filings incur 25% surcharge + 20% annual interest
• Omitting Foreign Exchange Income: Crypto earnings from overseas platforms are still taxable

Essential Tools for Filipino Crypto Taxpayers

• Tax Software: Koinly (supports PH tax rules), Accointing
• Exchange Rate Sources: BSP website, CoinGecko PHP converters
• Record Keeping: Cointracker.info, custom Excel templates
• BIR Resources: eBIRForms portal, RMC No. 102-2021 guidelines

Frequently Asked Questions

• Is P2P crypto trading taxable? Yes, all peer-to-peer profits must be reported as capital gains.
• Do I pay taxes on crypto losses? Capital losses can offset gains but not ordinary income. Unused losses carry forward for 3 years.
• How is crypto taxed if I hold long-term? Assets held over 12 months qualify for lower capital gains rates (0-15%).
• Are airdrops and forks taxable? Yes, treated as ordinary income at fair market value when received.
• What if I use overseas exchanges? You still must report income – the BIR requires worldwide income declaration.
• Can I deduct crypto transaction fees? Yes, exchange and network fees reduce taxable gains when properly documented.

Disclaimer: This guide provides general information only. Consult a BIR-accredited tax professional for personalized advice regarding your crypto transactions.