Well, it’s finally happened.  Some government has noticed that electronic currency is just scrip and they aren’t getting a piece of the action.  The Wall Street Journal is reporting that China plans to levy a 20% tax on virtual earnings.  Ostensibly, this tax targets currency resellers who buy currency from gamers and distribute it with a markup (think gold farmers).  Not that China can really be blamed for its interest, seeing how 20% of $500,000,000 isn’t chump change.  Of course, $500M is just from gold farming.  Other vendors actually sell scrip that can be used for instant messenging, virtual goods, and pretty much the entire rainbow of virtual assets and services.

Interestingly, this tax seems to target only individual profits–companies are exempt.  Worse still for the individual, if they cannot produce a receipt of sale, the government gets to determine the fair value of the transaction.

I wonder how feasible this will be.  It seems like a tricky problem to track all these transactions and enforce the policy.

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Tags:   china · scrip · tax · virtual currency · virtual economyNo Comments

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