South Korea Now Officially Taxing Virtual Worlds

Next Generation is reporting that the South Korean government's goal to get their cut of the real money transfer industry is now in the works. Folks who sell over $6,500 worth of virtual goods or currency in a given year will have an automatic Value Added Tax (VAT) withdrawn by the service they contract through. That is, the middleman service will remove taxes automatically for these repeat customers. If a South Korean sells over $13,000 worth of goods or currency in a given year, the government considers them a small business. As such, individuals in that position are required to obtain a business license and take care of taxes themselves. "An NTS official claims the organization will be able to monitor all transactions as RTM mediators have agreed to share clients' transaction details with the authorities. 'NTS would be able to track all transactions for taxation of virtual items,' Mr. Choi said. 'This is not about defining RMT legal/illegal; we don't see any contradictory facts to Amendment for Game Industry Promoting Law - we are not about to judge if RMT is legal or not,' he added."

Exactly how it should be handled....

[MaineCoon]

... and frankly, US tax law already handles the situation, but it is up to the individual to report their income.

South Korea simply made a law that requires the transaction service being used to apply the tax.

Re:Exactly how it should be handled....

[AuMatar]

Not really. If you're making a few hundred a year, sure. But in that case the government doesn't give a shit, it isn't worth its time. If you're making a few thousands or tens of thousands, you run a risk of being caught and prosecuted. In this bracket, its not worth the risk of not reporting.

Re:No, they're not

[east coast]

Good to have that pointed out early.

That won't matter. We're still going to have 80 14 year olds crying that they're being put down "by the man" and explaining that this is nothing new (as far as taxation goes, at least) is going to do nothing but have them calling you a governmental shill.

Actually, on the contrary

[Moraelin]

I don't get it... I expect stuff like this from Newspapers....but /. ? Maybe I'm missing something but are articles weighted on how may people click on them?

Actually the exact opposite is probably true. Most newspapers, at least in the western world, discovered around the start of the 20'th century that it pays to at least pretend to be impartial. Yes, they still aren't really impartial, and they still kept their opinion columns (although at least now they're more or less marked as such, and not as hard news) but they're a lot more subtle in their manipulation than that.

It's not even as much doing the morally right thing, it's just business. At some point the public as a whole was largely fed up with the hyperbole- and libel-ladden pieces of journalism and pamphlets of the 19'th century. So someone discovered, much to their surprise, that they actually have more readers if they just report the news, instead of fabricating it or outright telling people what to think about it.

Again, I'm aware it's still nowhere near perfect, and even "impartiality" means something slightly different to the media than to the rest of us. I'm not entirely naive, trust me. I'm just saying it used to be a lot worse. "Protocols of the Elders Of Zion" kinda bad, or claiming that Lincoln was at the head of some subversive African conspiracy. Inventing ridiculous super-villain-type plans of your opponents (e.g., that they're actually proposing building sewers or a subway so they can blow their own capital up from below, when their Illuminati masters order it) used to be just business as usual.

At any rate, nowadays an actual printed newspaper would be a lot less blatantly inflammatory there. Even if they wanted to manipulate you into being for or against it (which actually newspapers themselves don't often do, but is often is the case with PR pieces submitted as news), they'd work hard into making it look like they just gave you the data and you reached the "whoa, it's evil" conclusion yourself. Especially in PR there are people damn skilled at _not_ looking blatantly partisan. It would involve some interviews, some impartial study maybe, and in "journalistic impartiality" tradition it would involve two conflicting points of view, and they're not telling you which of the two to believe. (Just incidentally the one pro-taxing ends up saying the wrong things, and causing a "well, I'm not siding with _this_ guy" reaction.)

Unfortunately, (or maybe fortunately, you can choose) Slashdot stories are rarely submitted by real journalists. They're _usually_ submitted by nerds who never figured the "pretend to not tell people what to think" part, so they outright go ahead and do that. Some (though not all) even have an axe to grind, an ideological crusade to fight, and a messiah complex to save you all from the evil corporations/government/current-economic-model/wha tever. So, yeah, expect inflammatory stuff like this.

It's not like it's the first time anything like this happened, anyway.

Re:Should I RTFA?

[IQgryn]

As long as the money is taxed, along with any interest gained on it while it was in the alternate currency, I don't see a problem. The goal of taxes is (hopefully) not to prevent profit, but to ensure that a portion of all money earned goes towards the public good. If the money is effectively removed from the economy, there is no need to tax it until it is returned. It would be different if the virtual currency were being traded for real goods, since then the virtual currency isn't really virtual anymore. If the government wants to tax virtual currency directly, they should be prepared to accept virtual currency as payment, and I don't think they'll be willing to do that until they can do something useful with it.