Subscribe to website updates
Search the Virtual Law News archiveRL Taxation of Business in Virtual Worlds
Linden Lab imposes Value Added Tax (VAT) on European users
"Second Life | Value Added Tax" (secondlife.com/corporate/vat.php)
September 27, 2007
From Second Life's website: "In accordance with the sales tax regulations of European Union countries in which our Residents live, we must collect and remit Value Added Tax, or VAT, from Residents..." (more)
European Residents to pay Value-Added Tax on Second Life
Thursday, September 27, 2007
SLOG: A Second Life resident blog
http://secondslog.blogspot.com/2007/09/european-residents-to-pay-value-added.html>Link
"All European users (yes, the 4 or 5 millions of them) received today a nice email from Linden Lab with an unexpected "surprise": starting immediately, all European residents will be charged Value-Added Tax on their purchases from Linden Lab...." (more)
Tax office tackles growing trade in virtual items for real money
The Independent
04 August 2007
"HM Revenue and Customs has begun investigating people who are making real-life profits on the life-simulation computer game, Second Life...." (more)
"RMT Taxation starts in Korea from 1 July 2007"
"26 June 2007, Korea National Tax Service(NTS), equivalent to IRS in US, announced they would impose VAT (value added tax) on RMT (real money trading) from 1 July...".
Source:http://www.etnews.co.kr/news/detail.html?id=200706260121 (Korean language)
"South Korea to Impose VAT on Real Money Transactions Starting July 1"
Law of the Game
Includes explanation of VAT (Value Added Tax)
"Congress set to issue virtual taxation report in August"
C-NET News.com
June 22, 2007
"IRS taxation of online game virtual assets inevitable"
A series of tax law experts weigh in on whether the transfer of virtual goods in online games is taxable.
Staff Writer, CNET News.com
December 3, 2006
Australia says virtual income taxable - report
Wed Nov 1, 2006 10:11am PST
"SECOND LIFE, Nov 1 (Reuters) - The Australian government has determined that income earned in virtual economies like Second Life and World of Warcraft should be taxed, as authorities in the United States and Britain study the issue, according to a report in the Sydney Morning Herald...."(more)
Congress Hears From Entropia on VW Taxation.
August 9, 2007
3pointD.com
"It looks like MindArk, the company behind Entropia Universe (whose virtual currency is pegged and freely tradeable at 10 to the U.S. dollar), is getting in on the Washington lobbying act. Congress has been looking at issues of taxation related to virtual worlds since at least last October, and the Joint Economic Committee is long overdue with a promised report. (Or did I miss this?) This week, it seems, they?ll hear from Marco Behrmann, MindArk?s CIO, who is in Washington to speak to the IRS as well, according to this post on the RCE Universe forums..." (more)
Virtual World Tax Debate Gathers Steam.
December 3, 2006
3pointD.com
"I spent Friday and Saturday at the joint State of Play / Terra Nova symposium at the New York Law School. There was a lot of interesting talk, but probably none more so than the panel on taxation and virtual worlds that was held Saturday morning." (more)
Second Lilfe's Looming Tax Threat
March 2, 2007
CNNMoney.com staff writer
"NEW YORK (CNNMoney.com) -- In case you haven't noticed, Second Life is booming, and its economy has boomed too - putting the virtual reality world in the crosshairs of tax authorities, experts say." (more)
Gaming symposium discusses taxation in virtual worlds
December 04, 2006
Ars Technica
"At the just concluded State of Play/Terra Nova Symposium, participants pondered the growth of MMORPGs and other virtual worlds along with the state of research into the phenomenon. One of the panels, "Tax and Finance," looked into the economics of virtual economies with the participants discussing the likelihood of the taxman showing up in cyberspace." (more)
Income Earned In Virtual Worlds: Taxation Issues
26-JUN-07 (Originally published in e-Finance & Payments Law & Policy, Volume 1, Issue 7, April 2007)
The explosion in virtual worlds has raised some interesting questions about when taxation should apply. Does tax apply to a virtual transaction that takes place in a virtual currency, or does it apply when that income is converted into 'real world' currency? Graeme Nuttall, a partner with Field Fisher Waterhouse LLP, examines these issues and the view of taxation authorities from around the world." (more)
IRS taxation of online game virtual assets inevitable
December 3, 2006
Staff Writer, CNET News.com
"NEW YORK--If you are a hard-core player of virtual worlds like World of Warcraft, Second Life, EverQuest or There, IRS form 1099 may someday soon take on a new meaning for you.
Australia says virtual income taxable - report.
Nov 1, 2006 10:11am PST
Reuters/Second Life
"SECOND LIFE, Nov 1 (Reuters) - The Australian government has determined that income earned in virtual economies like Second Life and World of Warcraft should be taxed, as authorities in the United States and Britain study the issue, according to a report in the Sydney Morning Herald." (more)
'Stranger than Fiction': Taxing Virtual Worlds
Lederman, Leandra, "'Stranger than Fiction': Taxing Virtual Worlds" . New York University Law Review, Vol. 82, 2007 Available at SSRN: http://ssrn.com/abstract=969984
"Abstract: Virtual worlds, including massive multi-player on-line role-playing games (game worlds), such as City of Heroes, Everquest, and World of Warcraft, have become popular sources of entertainment. .... Many of these worlds have become commodified, with millions of dollars of real-world trade in virtual items taking place every year. Most game worlds prohibit these real market transactions, but some worlds actually encourage it....Although it seems intuitively the case that someone who accepts real money for the transfer of a virtual item should be taxed, what about the player who only accumulates items or virtual currency within a virtual world? Is valuable ?loot? acquired in a game taxable, as a prize or award is? And is the profit in a purely in-game trade or sale for virtual currency taxable?" (more)
The Play's the Thing: A Theory of Taxing Virtual Worlds
Camp, Bryan T., "The Play's the Thing: A Theory of Taxing Virtual Worlds" (August 9, 2007). Available at SSRN: http://ssrn.com/abstract=980693
"Abstract: Taxation is shadow life. As our culture monetizes more and more life activities, the shadow grows. This article looks at the potential tax issues arising from a new life activity: online role-playing games in virtual worlds. Currently, some 12 million people regularly play such games and the number is growing. Exploring the reach of the Tax Code into virtual world transactions not only responds to the potentially practical needs of millions of U.S. taxpayers, it also permits a reevaluation of core principles of income tax as they interplay with life activities in the context of 21st century American culture." (more)
Tax Day: Should You Pay Taxes on MMO Loot? ("Should You List Elves on Your 1040?")
04.16.2007
from 1UP.com (Originally published in Games For Windows, #5 April 2007)
"It's the same scene every year: panic, rioting in the streets of the Undercity, women pulling their baby Murlocs in off the sidewalks. Some rabble-rouser rides across the Internet like Paul Revere, shouting, "The taxmen are coming!" and we commence flipping our lids. All right, so it's really more of a collective slight nervousness than a full-on paranoid bedlam, but taxation's an easy topic to get touchy about whenever April rolls around. We can only stomach so many news stories describing MMO X as having a gross domestic product greater than Third-World-country Y before we start wondering when the powers that be will smell the money." (more)
Virtual World Taxation: Theories of Income Taxation Applied to the Second Life Virtual Economy.
Unpublished paper
"...This article explores the federal income tax consequences of the creation and expansion of Second Life?a virtual world where real people can engage in behavior constrained only by the time and efforts of those who wish to create the medium for a particular activity." (more)
Virtual world: tax man cometh
The Age (theage.com/au)
October 31, 2006
"Best consult your accountant before selling your Level 60 gnome warlock, for you may end up facing a terrible foe: the tax man." (more)
Congress Joint Economic Committee Talking to Virtual Worlds Operators
August 22, 2007
Virtual Worlds News
"There's been a lot of talk over a report on virtual goods taxation set to come out of the Joint Economic Committee soon. They're still researching, though, and Senior Economist Dan Miller has been discussing the space with representatives from Flagship Studios, Vivendi, Linden Lab, the ESA, and the Electric Sheep Company.Two weeks ago, representatives of the committee spoke with MindArk CIO Marco Behrmann and Chief Marketing Officer Carl Uggla. 'I'd love to hear back from more firms and people,' Miller told VirtualWorldsNews, 'but that?s about it so far.'" (more)
Where Real Money Meets Virtual Reality, The Jury Is Still Out
December 26, 2006
Washington Post Staff Writer
"Veronica Brown is a hot fashion designer [in Second Life].... [she] got an unnerving reminder last month of how tenuous her livelihood is when a rogue software program that copies animated objects appeared in Second Life..." (more)