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Whenever a Government Official says something along the lines of "There is a concern that the IRS (Internal Revenue Service) might step forward with regulations that start taxing transactions that occur within virtual economies," then you know that the IRS are about step forward with regulations that start taxing transactions that occur within virtual ecomomies.
The Joint Economic Committee reportedly say they are interested soley in the "universe of transactions" and "a better understanding of where the line falls between taxable and non-taxable trade."
In short, pull the other one. They're looking for revenue.
Full story here: US Congress steps into Cyberspace
At the extreme end of the scale, the ramifications could be:
- RMTs are forced to become 'more legit' and pay tax (serves them right)
- Sony's Station Exchange gets hit by the taxman (serves them right, they're taxed already but getting taxed again just rubs it in)
- Square Enix are forced to supply a yearly audit of all players' income and expenditure on a quarterly basis, and then you receive a taxbill for REAL money, because all your virtual transactions, whether it be synthing a jar of Vitriol from a couple of treant bulbs to putting a Rabbit Charm up for sale on the AH, have a value associated with them. (And I don't think they'll accept payment in Gil)
The natural development from all this is a decade away, but I can forsee the taxman starting to sniff around your hard drives, memory cards, zip drives etc to see if you've accrued anything of virtual value in an offline game just in case you were thinking of trading it to someone at school/work.
My argument for the JEC to digest would be if the operators of their own games can't work out which transactions are RMT or not, how do you expect to decide what should be taxed and what shouldn't?
The Joint Economic Committee reportedly say they are interested soley in the "universe of transactions" and "a better understanding of where the line falls between taxable and non-taxable trade."
In short, pull the other one. They're looking for revenue.
Full story here: US Congress steps into Cyberspace
At the extreme end of the scale, the ramifications could be:
- RMTs are forced to become 'more legit' and pay tax (serves them right)
- Sony's Station Exchange gets hit by the taxman (serves them right, they're taxed already but getting taxed again just rubs it in)
- Square Enix are forced to supply a yearly audit of all players' income and expenditure on a quarterly basis, and then you receive a taxbill for REAL money, because all your virtual transactions, whether it be synthing a jar of Vitriol from a couple of treant bulbs to putting a Rabbit Charm up for sale on the AH, have a value associated with them. (And I don't think they'll accept payment in Gil)
The natural development from all this is a decade away, but I can forsee the taxman starting to sniff around your hard drives, memory cards, zip drives etc to see if you've accrued anything of virtual value in an offline game just in case you were thinking of trading it to someone at school/work.
My argument for the JEC to digest would be if the operators of their own games can't work out which transactions are RMT or not, how do you expect to decide what should be taxed and what shouldn't?
Garin wrote:
> Erm....I think you're going a bit over the top there.
That's why I said 'Worst case scenario' just before it. You need to keep in mind that when people were posting a decade ago about the upcoming RMT businesses and the fact that one day governments might take an interest in virtual economies people said 'Erm....I think you're going a bit over the top there.'
> How is this a grey area?
It's a grey area in that most countries have laws pertaining to IPT, but when it comes to Publisher vs RMT Company they're untested.
It's a messy enough situation as it is what with cross-continent trades, Copyright, IPT, DMA and DRM laws all getting entangled and the general 'well everyone's doing it so it must be legal' attitude that seems to pervade when it comes to all things online without a bureaucracy the size of the JEC getting involved as well.
If it was the Law Lords sticking their noses in to try and sort out the legal mess once and for all I wouldn't mind so much, but the 'send in the taxman first ask questions later' approach doesn't appeal.
> Erm....I think you're going a bit over the top there.
That's why I said 'Worst case scenario' just before it. You need to keep in mind that when people were posting a decade ago about the upcoming RMT businesses and the fact that one day governments might take an interest in virtual economies people said 'Erm....I think you're going a bit over the top there.'
> How is this a grey area?
It's a grey area in that most countries have laws pertaining to IPT, but when it comes to Publisher vs RMT Company they're untested.
It's a messy enough situation as it is what with cross-continent trades, Copyright, IPT, DMA and DRM laws all getting entangled and the general 'well everyone's doing it so it must be legal' attitude that seems to pervade when it comes to all things online without a bureaucracy the size of the JEC getting involved as well.
If it was the Law Lords sticking their noses in to try and sort out the legal mess once and for all I wouldn't mind so much, but the 'send in the taxman first ask questions later' approach doesn't appeal.
FantasyMeister wrote:
> You sell a Rusty Greatsword to an NPC shop for 3 gold, the
> Taxman is going to want his cut, regardless of whether or not
> you could have sold it for £5 elsewhere.
Erm....I think you're going a bit over the top there. A real transaction hasnt taken place. What you arent recognizing is that games like WoW dont accrue you any rights to the content. You dont own any of it, the gold and the sword all belong to eg Blizzard. All you're doing is transfering blizzard's content around, ownership hasnt changed.
> Games like World of Warcraft and FFXI on the other hand are big
> grey areas. RMT in both these titles is against the terms of
> use, but it goes on in country-sized GDP scales and that's where
> the big money is. If taxmen wise up to that fact, they're going
> to want their cut whether or not RMT is sanctioned by the game
> publishers or not.
How is this a grey area? As Edgy already pointed out, technically RMT is already taxable income. That it might be against the game's EULA is irrelevant as its not a criminal matter.
> You sell a Rusty Greatsword to an NPC shop for 3 gold, the
> Taxman is going to want his cut, regardless of whether or not
> you could have sold it for £5 elsewhere.
Erm....I think you're going a bit over the top there. A real transaction hasnt taken place. What you arent recognizing is that games like WoW dont accrue you any rights to the content. You dont own any of it, the gold and the sword all belong to eg Blizzard. All you're doing is transfering blizzard's content around, ownership hasnt changed.
> Games like World of Warcraft and FFXI on the other hand are big
> grey areas. RMT in both these titles is against the terms of
> use, but it goes on in country-sized GDP scales and that's where
> the big money is. If taxmen wise up to that fact, they're going
> to want their cut whether or not RMT is sanctioned by the game
> publishers or not.
How is this a grey area? As Edgy already pointed out, technically RMT is already taxable income. That it might be against the game's EULA is irrelevant as its not a criminal matter.
Edgy wrote:
> If you're already paying some sort of VAT on a transaction
> already - you're not going to be charged further VAT again.
You buy a car, you pay VAT.
You want to take it out on the road, you pay Road Tax
You want to do it legally, you pay IPT on your insurance
You want to get anywhere, you pay VAT on your fuel
All I'm saying is in ye olde days:
You bought a game, you paid VAT.
Worst case scenario here is:
You buy a game, you pay VAT.
You sell a Rusty Greatsword to an NPC shop for 3 gold, the Taxman is going to want his cut, regardless of whether or not you could have sold it for £5 elsewhere.
I really do hope that they nail RMT on the head with this one and keep taxation soley to those games that encourage RMT.
Games like World of Warcraft and FFXI on the other hand are big grey areas. RMT in both these titles is against the terms of use, but it goes on in country-sized GDP scales and that's where the big money is. If taxmen wise up to that fact, they're going to want their cut whether or not RMT is sanctioned by the game publishers or not.
Seems to me they want to push companies like IGE out of business just to take their place, and that does nothing to stamp out RMT.
> If you're already paying some sort of VAT on a transaction
> already - you're not going to be charged further VAT again.
You buy a car, you pay VAT.
You want to take it out on the road, you pay Road Tax
You want to do it legally, you pay IPT on your insurance
You want to get anywhere, you pay VAT on your fuel
All I'm saying is in ye olde days:
You bought a game, you paid VAT.
Worst case scenario here is:
You buy a game, you pay VAT.
You sell a Rusty Greatsword to an NPC shop for 3 gold, the Taxman is going to want his cut, regardless of whether or not you could have sold it for £5 elsewhere.
I really do hope that they nail RMT on the head with this one and keep taxation soley to those games that encourage RMT.
Games like World of Warcraft and FFXI on the other hand are big grey areas. RMT in both these titles is against the terms of use, but it goes on in country-sized GDP scales and that's where the big money is. If taxmen wise up to that fact, they're going to want their cut whether or not RMT is sanctioned by the game publishers or not.
Seems to me they want to push companies like IGE out of business just to take their place, and that does nothing to stamp out RMT.
When they say virtual transactions...they're going to be talking about transactions where real money is involved.
Imagine every time you spent rupees on any Zelda game you got taxed...
If you're already paying some sort of VAT on a transaction already - you're not going to be charged further VAT again.
If you're making money by selling virtual capital, you're already earning a taxable income. However, just like a paper-round is a taxable income, you've still got to have an annual income over a certain amount before you actually pay any income tax.
Anyway, accruing something of virtual value is different to selling something of virtual value. If it is a file included on a CD/DVD/etc that you have bought, then as long as you aren't making any real money out of it, you can't be taxed again for having the file. After all, you've already paid VAT.
It's like if you get a free gift in a box of cereal...you don't pay any extra tax for the item you have accrued.
I'm not worried about the potential tax implications announced. If the IRS do impose these things, and if they ever effect me, I could always attempt to claim the tax back. And if the transactions are governed by HM Revenue & Customs rules (e.g. UK transactions) then the IRS wont actually have a say.
Imagine every time you spent rupees on any Zelda game you got taxed...
If you're already paying some sort of VAT on a transaction already - you're not going to be charged further VAT again.
If you're making money by selling virtual capital, you're already earning a taxable income. However, just like a paper-round is a taxable income, you've still got to have an annual income over a certain amount before you actually pay any income tax.
Anyway, accruing something of virtual value is different to selling something of virtual value. If it is a file included on a CD/DVD/etc that you have bought, then as long as you aren't making any real money out of it, you can't be taxed again for having the file. After all, you've already paid VAT.
It's like if you get a free gift in a box of cereal...you don't pay any extra tax for the item you have accrued.
I'm not worried about the potential tax implications announced. If the IRS do impose these things, and if they ever effect me, I could always attempt to claim the tax back. And if the transactions are governed by HM Revenue & Customs rules (e.g. UK transactions) then the IRS wont actually have a say.
Whenever a Government Official says something along the lines of "There is a concern that the IRS (Internal Revenue Service) might step forward with regulations that start taxing transactions that occur within virtual economies," then you know that the IRS are about step forward with regulations that start taxing transactions that occur within virtual ecomomies.
The Joint Economic Committee reportedly say they are interested soley in the "universe of transactions" and "a better understanding of where the line falls between taxable and non-taxable trade."
In short, pull the other one. They're looking for revenue.
Full story here: US Congress steps into Cyberspace
At the extreme end of the scale, the ramifications could be:
- RMTs are forced to become 'more legit' and pay tax (serves them right)
- Sony's Station Exchange gets hit by the taxman (serves them right, they're taxed already but getting taxed again just rubs it in)
- Square Enix are forced to supply a yearly audit of all players' income and expenditure on a quarterly basis, and then you receive a taxbill for REAL money, because all your virtual transactions, whether it be synthing a jar of Vitriol from a couple of treant bulbs to putting a Rabbit Charm up for sale on the AH, have a value associated with them. (And I don't think they'll accept payment in Gil)
The natural development from all this is a decade away, but I can forsee the taxman starting to sniff around your hard drives, memory cards, zip drives etc to see if you've accrued anything of virtual value in an offline game just in case you were thinking of trading it to someone at school/work.
My argument for the JEC to digest would be if the operators of their own games can't work out which transactions are RMT or not, how do you expect to decide what should be taxed and what shouldn't?
The Joint Economic Committee reportedly say they are interested soley in the "universe of transactions" and "a better understanding of where the line falls between taxable and non-taxable trade."
In short, pull the other one. They're looking for revenue.
Full story here: US Congress steps into Cyberspace
At the extreme end of the scale, the ramifications could be:
- RMTs are forced to become 'more legit' and pay tax (serves them right)
- Sony's Station Exchange gets hit by the taxman (serves them right, they're taxed already but getting taxed again just rubs it in)
- Square Enix are forced to supply a yearly audit of all players' income and expenditure on a quarterly basis, and then you receive a taxbill for REAL money, because all your virtual transactions, whether it be synthing a jar of Vitriol from a couple of treant bulbs to putting a Rabbit Charm up for sale on the AH, have a value associated with them. (And I don't think they'll accept payment in Gil)
The natural development from all this is a decade away, but I can forsee the taxman starting to sniff around your hard drives, memory cards, zip drives etc to see if you've accrued anything of virtual value in an offline game just in case you were thinking of trading it to someone at school/work.
My argument for the JEC to digest would be if the operators of their own games can't work out which transactions are RMT or not, how do you expect to decide what should be taxed and what shouldn't?