20% Tax on Virtual Property in China

[Mr. Hrm]

The State Administration of Taxation said on its Web site Wednesday (in Chinese) that China will impose a personal income tax of 20% on profit from virtual money. 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.

China Journal : Real Taxes for Real Money Made by Online Game Players

[ionscorp]

Another great way to allow China's economy to boom even more 0.o...

[Mr. Hrm]

It may prove hard to enforce.

[Heavyoak]

wait, what?

[ultramega]

Well that makes sense. If I am reading this correctly, it only affects people selling virtual assets for real money. Might take a nice chunk of goldsellers off the market, or force them to raise their prices to continue making profit which will in turn offturn many buyers. I'm for this.

[Heavyoak]

ah ok.

[Tenebrous]

Originally Posted by ultramega

Well that makes sense. If I am reading this correctly, it only affects people selling virtual assets for real money. Might take a nice chunk of goldsellers off the market, or force them to raise their prices to continue making profit which will in turn offturn many buyers. I'm for this.

I'm inclined to agree. I know that it will be hard to enforce for small-time sellers, but the larger ones will find it hard to avoid. This is a good principle to be working off of in my opinion for this kind of thing. I think you're right in that it will either diminish the amount of larger sellers out there (albeit only a little) or turn people away because of higher prices. I don't think it will have a huge impact overall - there will still be plenty of people willing to buy and sellers that can afford the hit as well as those that will be able to get away without reporting sales (i.e. you or me quitting a same and selling whatever is on our accounts). It's sort of a win-win for players and the Chinese government. Now all we need is a bunch of similar acts worldwide and that would prove to be a major hit.

[Heavyoak]

huh, if only this happened a year ago, runescape wouldn't have some many trade restrictions now.