Virtual Worlds News: China Levies 20% Tax on Virtual Currencies.

This is completely unsurprising — after all, levying tax on earnings made via selling virtual goods is something that the US does already (if you make money, they expect a cut, no matter where how how you made it) and it’s a lot more common in China than here. But there’s a wrinkle:

The ruling applies to QQ coins and the like as well as gameworld currencies, and based on the WSJ report, seems to apply whether or not the value is cashed out.

The announcement, which was distributed to local tax bureaus, specifically takes aim at those who buy virtual currency from gamers and surfers and sell it to others at a mark-up. Taxation officials are granted the right to determine the original price of online virtual currency if the individual fails to provide proof of an original price, it says.

Interestingly, companies seem to be exempt from taxes like these right now, presumably because the government there did so in order to incentivize economic growth in the sector.

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.