Are Pornhub earnings taxable? Yes

Before we proceed, to avoid complications, let us limit the discussion to a resident Filipino who makes porn videos here in the Philippines and uploads them on, thereby resulting in income.Income means all wealth which flows into the taxpayer other than as a mere return of capital.[1] In fact, the Tax Code defines gross income as follows:
"Gross Income" includes gains, profits, and income derived from salaries, wages or compensation for personal service of whatever kind and in whatever form paid, or from profession, vocations, trades, business, commerce, sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interests, rents, dividends, securities or the transactions of any business carried on for gain or profit, or gains, profits, and income derived from any source whatever.

The source of an income is the property, activity or service that produced the income. For the source of income to be considered as coming from the Philippines, it is sufficient that the income is derived from activity within the Philippines.[2] 

The definition is broad and comprehensive enough to include proceeds from sales or income from legal and illegal sources. The words "income from any source whatever" disclose a legislative policy to include all income not expressly exempted within the class of taxable income under our laws.[3] Hence, in the absence of a legal basis for the exemption of income from the coverage of tax laws, such income is taxable.

In the legal community, there is hardly any argument against the rule that income from illegal activities should be subject to taxation. According to Borek (1992), if this were not the case, "nefarious individuals could avoid taxation merely by choosing to earn their living outside the bounds of the law."[4] Section 32 of the Tax Code itself swiftly declares that "all income derived from whatever source" is to be included as gross income and used in the calculation to arrive at taxable income.[5]

The 2011 case of Wood v. Commissioner confirms this, thus:
Section 61(a) provides: "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived". This broad definition of "gross income" includes income derived through illicit means including embezzlement, regardless of how the money is used and although the embezzler may be required to repay the money in a later year. See James v. United States, 366 U.S. 213, 219-220 (1961).[6]
Although the Philippine Supreme Court has not yet decided on a case involving a taxpayer ordered to pay tax on income derived from illegal sources, it is safe to say that the same conclusion will be arrived at in case this happens because of the exact same phrasing of the U.S. Tax Code and that of ours.


[2] G.R. No. 72443, January 29, 1988, citing Madrigal and Paternol v. Rafferty and Concepcion, 38 Phil. 414 (1918).

[3] Id.

[4] Borek, Charles A. (1992) "Comments: The Public Policy Doctrine and Tax Logic: The Need for Consistency in Denying Deductions Arising from Illegal Activities," University of Baltimore Law Review: Vol. 22: Iss. 1, Article 5. Available at:

[5] SEC. 32. Gross Income. -

(A) General Definition. - Except when otherwise provided in this Title, gross income means all income derived from whatever source, including (but not limited to) the following items:

(1) Compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions, and similar items;

(2) Gross income derived from the conduct of trade or business or the exercise of a profession;

(3) Gains derived from dealings in property;

(4) Interests;

(5) Rents;

(6) Royalties;

(7) Dividends;

(8) Annuities;

(9) Prizes and winnings;

(10) Pensions; and

(11) Partner's distributive share from the net income of the general professional partnership.


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