Monday, November 3, 2008

The Virtual World Taxman Cometh

As aluded to previously, we all knew it was coming.

And notes:
[the ruling] seems to apply whether or not the value is cashed out.
(and goes on to note)
However, if the value is not cashed out and taxes are still paid, that could mean (maybe should mean) that the companies are liable if they manage to accidentally delete some of it. In other words, they’re banks.
I commented on his post that non-Chinese MMOs like Wow are probably glad they licensed the right to run servers in that country to other parties. Boggles the mind to think how something like this would apply, be determined, be policed, etc, if numerous countries were to institute similar laws. Thousands of individuals all paying taxes on income incurred in other countries (where the servers reside), and businesses in some cases being run from elsewhere than where the servers reside. Blech. What a mess!

It's already moderately messy to do taxes for, say, stock purchases & sales, if you do anything moderately frequent in the way of trading. Now imagine that on a micro-scale at an accelerated pace. 

As I understand it, in the USA, Internet commerce has been relatively hands-off in the area of taxation; as an incentive to promote growth. However that can't last forever, can it? At some point, growth has happened. Plus, no one is doing VW business in the US only going forward. 

This whole idea of 'countries' is obsolete :-)