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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Recommended Citation
Pillena, G. P. (2018). The next big thing since the internet (is here): Bitcoin and its tax treatment in the Philippines. Retrieved from https://animorepository.dlsu.edu.ph/etd_masteral/7237
Embargo Period
11-22-2024