"The next big thing since the internet (is here): Bitcoin and its tax t" by GC Joel Gertrude P. Pillena

The next big thing since the internet (is here): Bitcoin and its tax treatment in the Philippines

Date of Publication

3-2018

Document Type

Master's Thesis

Degree Name

Juris Doctor

Subject Categories

Tax Law

College

College of Law

Department/Unit

Law

Thesis Adviser

Oliver Xavier A. Reyes

Defense Panel Chair

Anthony B. Peralta

Defense Panel Member

Sergio M. Ceniza
Kerwyn D. Garcia

Abstract/Summary

In 2008, the global financial crisis sparked fear amongst investors of all races and genders. That was when the faith of people in financial institutions started to end, and their search for alternative means of savings and investments had begun.

Right after the financial crisis, bitcoin, both a virtual currency and a decentralized, peer-to-peer network, emerged as an alternative to the current financial system. Bitcoin is an intangible asset that exists only on the Internet in the form of computer code. It is not supported by any government or central bank, but it is being used as a medium of exchange across the globe. When used as payment for goods or services, there is an exchange of things of value, hence, transacting through bitcoin has inevitable tax consequences.

This study seeks to answer two main questions: 1) Are general tax principles, provided by the National Internal Revenue Code (NIRC) applicable to transactions involving bitcoin? 2) If yes, should the Bureau of Internal Revenue (BIRC) impose taxes on the parties to a bitcoin transaction? To answer these questions, the Researcher used critical examination and evaluative exploration of theses, academic journals, government reports and news on virtual currencies, with particular focus on bitcoin and taxation, vis-à-vis pertinent laws, revenue regulations and jurisprudence.

Through an econometric approach, this study settles that bitcoin is neither e-money, legal tender or fiat currency in the Philippines. Rather, it is a virtual currency used as a medium of exchange, for delivery of financial services, particularly for payments and remittances.

In applying the pillars of a sound tax system (fiscal adequacy and administrative feasibility), alongside the general principles of Philippine tax laws, the Researcher recommends that the Bureau of Internal Revenue (BIR) issues a Revenue Regulation that shall serve as guidance for taxpayers, explaining how the NIRC and other related laws apply to transactions involving virtual currency, such as bitcoin.

Abstract Format

html

Language

English

Format

Electronic

Accession Number

CDTG007485

Shelf Location

Archives, The Learning Common's, 12F Henry Sy Sr. Hall

Physical Description

1 computer optical disc; 4 3/4 in.

Keywords

Bitcoin--Philippines; Cryptocurrencies—Law and legislation--Philippines; Taxation—Law and legislation--Philippines

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Embargo Period

11-22-2024

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