China creates virtual trade tax

A YEAR AGO, China attempted a ban on virtual currencies in online worlds. Today, they’ve taken stock of how much money this business actually generates – an estimated $1.45 billion. Officials have thrown in the towel on the ban and have opted to tax the evil merchants where it hurts the most. The Chinese State Administration of Taxation will be collecting a 20 per cent tax on the virtual goods market, reports PaidContent.org.

Gold farming and the off-line sale of the gold hoard is frowned upon by most MMORPG publishers, as it gives real-life wealthy players a massive edge in the game. But in China there are dozens of gamer firms that conduct their business solely by gold farming or simply developing characters and selling them off to the highest bidder – locally and abroad.

Odd as this may seem, China didn’t come up with the idea first. That privilege goes out to our aussie cousins, who beat the world to it by two whole years. In Australia, income derived from these transactions is taxed in full as would be any other real-life income.

If you want to know exactly how China plans to implement such a tax, your guess is as good as ours, it’s not like these transactions are declared in your typical Chinese income statement and we can’t really see the People’s Republic putting up ads for “gaming commissars needed, MMORPG experience a must”.

However, the next time you see a level 80 warlock in garish red colours chasing down players and shaking them down for 20 per cent of that Mantle of Dominion sale, don’t worry, it’s just your friendly neighbourhood taxman on his collection round. µ

L'Inq
PaidContent.org