In-world taxes could hit Sweden
Not sure how I missed this before!
Sweden moves to tax in-game transactions | Virtual Economy Research Network
Transactions between participants in a virtual world, where the deal is about the sale of a “product” or a “service” against reimbursement in an internal currency, should be considered, according to the Swedish Tax Agency’s ruling, [actual] sales of electronic services, if the internal currency can be exchanged to a valid legal means of payment. If the internal currency cannot be exchanged to money, the transactions should not be considered [actual] sales.
Edit: to be clear, the reason this is important is because it refers to taxing in-world earnings prior to cashout. Limited to virtual currencies with a cashout mechanism, but still — the line isn’t drawn where the virtual currency becomes “real.”
8 Responses to “In-world taxes could hit Sweden”
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I’m not sure how much of a move this is?
After skimming the original they appear to say that the current sales-tax laws also applies to professional work done in virtual worlds. Then they define hobbyists to be professionals if the amount exceeds 5000USD.
That’s the only sane thing? Isn’t it? So why the excitement?
(For non-scandinavians: I believe the sales tax is around 25% so tax evasion could be tempting, which is probably why they bother to do this in writing.)
The key thing is that this is being taxed on “game money,” not on real money. It happens before the cash-out.
Ok, I don’t know much about taxation, but I think sales-tax is supposed to be added at each entity in the chain of transaction (you get a “refund” when you cash-out) if you sell for more than 5000USD per tax-year.
I know for a fact that I in general can be taxed without cashing out, for instance if I chop a lot of fire-wood and use it myself (this is Norway though, but I think we are usually comparable to Sweden). Likewise if you grow your own food or build your own hose it is subject to income-tax. Dunno if it is like this in the US.
I agree that it is “special” to write about taxation and “games”, however the tax people seem to focus on “professional” in their document. It’s not the only area where professionals have “sold” services without “cashing out”, so I am not surprised.
It’s only been floating around for a couple of days, afaik. And Forbes is also talking vTaxes. That time of the year. But yes, the interesting thing is people talking about taxing “fake” money.
Meant to include the Forbes link: Taxing Virtual Worlds
Being from sweden I know that the tax system is notorious for implementing poorly designed rules.
One thing they will never understand is how the value of “virtual wealth” is inversely proportaional to volume in a way which normal currencies are not. The full market demand for purchases is easily satisfied by a tiny fraction of the total available supply of virtual currency.
Anyhow, if they go about with this i’ll cancel my WoW account and claim some type of tax compensation for the loss of several thousand dollars worth of virtual wealth. ^^
The Richard Bartle prophecy begins…