Are Esports Tournament Winnings Taxable in the Philippines? BIR Rules for Gamers

Cash prize money an individual wins from an esports or online gaming tournament held in or organized from the Philippines counts as “winnings … derived from sources within the Philippines” under NIRC Section 24(B)(1), the same provision that taxes raffle prizes and game-show winnings. If the prize exceeds ₱10,000, the tournament organizer must withhold a flat 20% final tax before paying out and issue BIR Form 2306; smaller prizes are instead added to the winner’s other taxable income at graduated rates.

Why tournament winnings fall under the same rule as raffle prizes #

NIRC Section 24(B)(1), as amended by the TRAIN Law (RA No. 10963), imposes a flat 20% final tax on prizes and other winnings derived from sources within the Philippines, with no carve-out for how the winnings were earned — a raffle draw, a game show, or a skill-based esports match all qualify the same way. The statute states:

“A final tax at the rate of twenty percent (20%) is imposed upon prizes (except prizes amounting to Ten thousand pesos (P10,000) or less which shall be subject to tax under Subsection (A) of Section 24) and other winnings (except winnings amounting to Ten thousand pesos (P10,000) or less from Philippine Charity Sweepstakes and Lotto which shall be exempt), derived from sources within the Philippines.”

— NIRC Section 24(B)(1), as amended by RA No. 10963 (TRAIN Law)

A Mobile Legends, Valorant, or Dota 2 tournament prize pool paid out by a Philippine-based organizer to an individual competitor sits squarely inside that language: it is a “winning” sourced within the Philippines, paid to a person who entered a competition rather than earning it through an employment relationship with the organizer. This is the same general rule already covered for raffles and promotional prizes at Withholding Tax on Prizes and Winnings in the Philippines; esports winnings are simply one more category of “winnings” the same provision reaches, not a special exception.

Which certificate a winner should receive: BIR Form 2306, not BIR Form 2307 #

Because the 20% tax on a Section 24(B)(1) prize is a final tax — one that fully and completely settles the winner’s income tax liability on that specific payout — the tournament organizer must issue BIR Form 2306, the Certificate of Final Tax Withheld at Source, not BIR Form 2307. BIR Form 2307 certifies creditable withholding tax, which the payee still has to report as income and credit against tax computed on their own return; a hobbyist tournament winner has no such further filing obligation on that prize once the final tax is withheld. For the full breakdown of why these two certificates document opposite withholding systems, see BIR Form 2306 vs BIR Form 2307: Final vs Creditable Withholding Certificates.

Hobbyist vs. professional gamer: the distinction is fact-specific #

Not every gamer’s winnings are taxed the same way, and the dividing line is the nature of the relationship between the player and whoever pays them — not simply whether they call themselves a “pro.”

For a professional under contract to a team or organization, tournament winnings are often pooled by the organization and then distributed to players according to a roster agreement — salary, revenue share, or a mix of both. When that is the actual structure, the payment functions more like compensation for services performed under a contract than a standalone prize won by an individual entering a contest on their own, which can shift it toward ordinary compensation withholding or business income taxed at graduated rates instead of the flat 20% prize tax. Whether that recharacterization applies depends entirely on the real contract terms and how the money actually moves — a team’s marketing claim of “professional player” does not by itself change the tax treatment; the payment structure does.

Winnings from a tournament held outside the Philippines #

When the tournament itself is organized and held outside the Philippines and the prize is paid directly by a foreign organizer, Philippine final withholding by that organizer generally does not happen, because a foreign entity outside the country is outside the BIR’s withholding jurisdiction. That does not make the winnings tax-free for a Filipino recipient, however. A resident citizen is taxed on income earned anywhere in the world, so tournament winnings from a foreign-organized event must still be self-declared on the player’s own annual income tax return. See Is a Resident Citizen’s Foreign-Sourced Income Taxable in the Philippines? for the full worldwide-taxation rule this scenario falls under.

Not to be confused with POGO taxation #

Esports tournament winnings tax and the tax rules for Philippine Offshore Gaming Operators (POGOs) are entirely separate regimes that happen to both involve the word “gaming.” Republic Act No. 11590 taxed licensed POGOs — the gambling operators themselves — at 5% of their gross gaming revenue, plus 25% corporate income tax on non-gaming revenue and withholding on their foreign staff, before POGOs were banned outright in 2024-2025. None of that framework has anything to do with an individual esports player’s prize money; see How POGOs Were Taxed Under RA 11590 for that operator-level tax, which should not be conflated with the player-level Section 24(B)(1) prize tax covered here.

Worked example: Marco’s ₱50,000 Mobile Legends tournament win #

Marco is an amateur Mobile Legends player who wins ₱50,000 in a local tournament organized by a Philippine gaming company. Because Marco enters tournaments as a hobby and has no contract with the organizer, his winnings are a straightforward Section 24(B)(1) prize.

The organizer withholds ₱10,000 before releasing Marco’s prize and remits it to the BIR as a final tax. Marco receives ₱40,000 net and, because the tax withheld is final, has no further obligation to declare that ₱50,000 as taxable income on his own return — he should keep the BIR Form 2306 the organizer issues as proof the tax was withheld and remitted.

Frequently asked questions #

Are esports tournament winnings taxable in the Philippines? #

Yes. Cash prize money an individual wins from an esports or online gaming tournament held in or organized from the Philippines is “winnings … derived from sources within the Philippines” under NIRC Section 24(B)(1). If the prize exceeds ₱10,000, the tournament organizer withholds a flat 20% final tax before releasing the payout; if it is ₱10,000 or less, it is instead added to the winner’s other taxable income at graduated rates.

What BIR certificate should a tournament winner receive? #

BIR Form 2306, the Certificate of Final Tax Withheld at Source. Because the 20% tax on a prize under Section 24(B)(1) is a final tax that fully settles the winner’s income tax on that specific payout, the organizer issues Form 2306, not BIR Form 2307, which certifies creditable withholding tax on income the recipient still has to report and compute tax on.

Does a professional gamer under contract to an org pay the same 20% final tax? #

Not necessarily. Whether the flat 20% final tax applies depends on the actual payment structure and contractual relationship. A hobbyist entering an occasional tournament clearly falls under Section 24(B)(1). A professional gamer under contract to a gaming organization, where tournament winnings are pooled and paid to the player through the org as part of their compensation or business arrangement, may instead have that income treated as compensation income or business income taxed at regular graduated rates, since it is earned through an ongoing contractual relationship rather than a one-off prize from an independent contest.

What happens if a foreign tournament organizer pays a Filipino player’s prize? #

If the tournament is held and organized outside the Philippines by a foreign organizer, that organizer generally is not required to withhold Philippine tax, since it falls outside the BIR’s withholding jurisdiction. The winnings remain taxable income to a Philippine resident citizen, however, who must self-declare the full amount on their own annual income tax return rather than relying on withholding at source.

Is esports tournament winnings tax the same as the POGO gaming tax? #

No, these are unrelated. The Section 24(B)(1) prize tax applies to an individual player’s tournament winnings. Republic Act No. 11590 imposed a separate 5% gaming tax on the gross gaming revenue of licensed Philippine Offshore Gaming Operators (POGOs) themselves, before POGOs were banned in 2024-2025 — a tax on a gaming operator’s business revenue, not on a player’s prize money, and the two rules should not be conflated.

Summary #

Prize money an individual wins from a Philippine esports or online gaming tournament is taxed as a Section 24(B)(1) “winning” — a 20% final tax withheld by the organizer and certified on BIR Form 2306 once the prize exceeds ₱10,000. That default shifts for a professional gamer whose winnings are actually paid through an organization as part of an ongoing contract, and it shifts again — to self-declared worldwide income rather than withholding at source — when a foreign organizer pays the prize from outside the Philippines. Check the real payment structure before assuming any single rate applies.