South Korea Now Officially Taxing Virtual Worlds 70
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who sell over $6,500 worth of virtual goods or currency in a given year will have an automatic Value Added Tax (VAT) withdrawn by the service they contract through.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."
No, they're not (Score:5, Informative)
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Re:No, they're not (Score:4, Insightful)
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.
80? (Score:1)
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Hello. Welcome to slashdot!
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> tax: real money changes hands, and the government takes a cut.
Mr Sarcasm says: Really, this isn't much different from any other protection racket: real money changes hands, and the mob takes a cut.
In exchange for not...is it hurting or jailing you? Oh, yeah. You have a 0.0000001% change of affecting your tax situation, making you much more powerful with respect to the mafia situation.
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I don't see how it's any different from taxing Ebay sales...I'm not exactly fond of the idea, but it's the same. If you buy something in USD, I'd expect that a USD tax could be applied to it, assuming it's bought within US jurisdiction. Same goes for Korea. I agree that the topic title is inflammatory...but if cash money is exchanging hands (not just Lindens or Gold Pieces or credits), the
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Actually, on the contrary (Score:5, Insightful)
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/wh
It's not like it's the first time anything like this happened, anyway.
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They're _usually_ submitted by nerds
No, they're usually submitted by marketers. They fraudulently astroturf wholesale in the comments as well.
You just need to look at the quantity of "product announcements" before products are even released to see that.
Vista and iPhone are recent examples. Practically daily content-free propaganda, sorry "stories", for months beforehand.
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Paid marketers are the worst zealots.
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The gold farmers make less than 1$ per hour, last I've read about it, so they're not quite in a position to hire a good PR firm and manufacture news.
Plus, their interests are better served by other kinds of articles, lik
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But don't take my word for it :
http://www.nmauk.co.uk/nma/do/live/historicpage [nmauk.co.uk]
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As an editor on a national newspaper once told his journalists: "never let the facts get in the way of a good story"
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The casual player that wants to "cash out" does not have nearly the same impact as a farming business.
However, the ability to cash out so easily often leads players to take on the same unscrupulous practices as the farmers.
This includes camping spawns unattended, scripting easily repeatable (profitable) actions, and (as mentioned elsewhere) hogging resources and/or NPCs needed by other players that are actually PLAYING the game.
Anything that discourages actions which impede legitimate p
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can we please have the informative, often funny, geek news site back? less of the flame inspring / woefully incorrect / press release bullshit!
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Exactly how it should be handled.... (Score:4, Insightful)
South Korea simply made a law that requires the transaction service being used to apply the tax.
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However, that is largely unenforceable. Hence why stories such as this _are_ news.
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Your post is like where you take a car and drop out the engine and wonder why it doesn't work! There, an analogy!
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Happens here too... (Score:1, Informative)
terms of services and middle-man (Score:2)
so if you use ebay that you don't have to pay the tax?
also what games like Second Life where you buy and sell from the people running / making the game with out a middle man?
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And in second life the ingame cash has a real world value (if I remember correctly), and thus that would be income/investments/net worth.
All this is doing is enforcing income tax. They sell something for $$, and the govn't taxes the transaction.
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also for a small business can you wire off the costs of playing the game?
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In Communist North Korea.... (Score:2)
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In North Korea, if you are so much as caught with an unauthorized radio, you are as good as dead.
I doubt a North Korean could get access to a computer unless it was part of his job. And if so, then he had better use it for that job and nothing else. Attempting contact the outside world in any way is treason.
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Should I RTFA? (Score:2)
[this] is not about defining RMT legal/illegal
Ummm.. can you tax illegal money transfer? And, like, imprison a thief for tax evasion along with, say, robbery? If they're taxing it, doesn't it HAVE to be legal?
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You may want to checkout Tax Evasion issues that Organized Crime deals with.
Heck, Al Capone got nailed with Tax Evasion.
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And, ironically, you are supposed to be able to go down to the post office (or somewhere) and be able to buy them, no questions asked.
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Nope, the IRS explicitly says that any money you get, legal or illegal, must be reported and can be taxed. It's just one of those ways governments have of artificially increasing the severity of the charges against someone.
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Ummm.. can you tax illegal money transfer? And, like, imprison a thief for tax evasion along with, say, robbery? If they're taxing it, doesn't it HAVE to be legal?
No. The IRS rules clearly state that you're required to report ALL income, including income from the black market, illegal sources, etc.
As was cited earlier, Al Capone was convicted of tax evasion. It doesn't matter if you're out there selling weed or working as a hooker, that income has to be reported and properly taxed.
Re:Should I RTFA? (Score:5, Interesting)
No, I'm not asking for personal legal advice, all you lawyers out there. I'm just asking if information disclosed this way has some special legal protection. It won't apply to me, since I don't sell drugs, so don't fret.
I might as well mention what the real problem is here, since people keep saying, "if you make a profit in terms of real dollars, that should be taxed, case closed". But if virtual money becomes liquid and convertible enough, government will *have to* tax it directly, even in-game. Why? Imagine this:
I want to defer taxes on dividends, like, you know, every investor with a taxable account wants to do. So let's say the stock exchange sets up "exchange dollars" (EDs), a special currency created and destroyed at will, simply by depositing a dollar or withdrawing it. The EDs are functionally identical to normal dollars, it's just that they only trade on the exchange. Whenever a corporation pays a dividend, it takes its normal dollars, buys EDs, and distributes the dividends. Whenever a corporation raises funds in an IPO, it takes the EDs and converts them to normal dollars. Now, should the investors still pay taxes on the ED dividends they got?
If you say no, then you don't think dividends should be taxed, because this scheme could be implemented today on the stock market -- but obviously, the government wouldn't fall for it.
If you say yes, then you agree that sufficiently-convertible virtual dollars should be taxed even if the profit exists only in-game. At some point, the virtual dollars become like the EDs or a foreign currency.
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(Remember: simply delaying the point at which you are taxed on your total gain can increase your returns, even though you "still pay taxes" at some point.)
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Report it as coming from something else. You might create a front organization for your drug trafficking operations that looks like a legitimate business and funnels money through all kinds of weird processes (labelled as seemingly legitimate expenses, charitable donation
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Okay, people keep saying this ... but when I report my "drug sales" net income (after amortizing my .45 and deducting bribes), won't they just turn that right around and charge you with a crime, implicitly requiring you to waive the fifth?
They can't directly charge you with a crime AFAIK, though perhaps they might be able to if you did something really boneheaded, like write "illegal drug sales" in the "type of business" section of your tax return.
However, your tax returns can be used as evidence agai
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EDs already exist. (Score:1)
EDs already exist, and they're called dollars. This ED scheme is no different than if you had a dollar-denominated account at the exchange, and dividends simply credited your account with a USD amount, which you could cash out at will or have it credited to any debts you incurred with the exchange.
Or to put it another way: dollars, in the general case, exist as credits to accounts. You don't have to be given actual dollar bills for that to count as income; it is sufficient that some account that you own
...or even simpler... (Score:1)
An ED is a security that gives its holder ownership interest on a dollar in some account that the ED issuer owns, without allowing the issuer to use or dispose of the dollar in any other way than paying the ED holder. If you own an ED, you indirectly own the dollar that backs that ED, period. If you come to own a dollar you didn't own before, that's called "income."
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http://www.wbir.com/news/local/story.aspx?storyid
So yeah, tax authorities don't care if you're doing something illegal or not, they just want their money.
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You can see it here:
http://www.irs.gov/pub/irs-pdf/p525.pdf [irs.gov]
Go down to page 28 under the section titled "Other Income". There's all sorts of funny stuff there like bribes, kickbacks, and illegal income (where they specifically mention selling illegal drugs). They figure that nobody actually reads the instructions that come with the 1040 forms. I guess I'm just obsessive-compulsive about fillin
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*uses super power* *waves and ignores*
Suppose (Score:2)
The people making money from this are usually well organized.
Good news for South Korea (Score:1)
Adding Accountancy Skill to My Mage (Score:3, Funny)