The Tax Man Comes To Virtual Australia

shadrach_au writes to mention that what was being considered in the states is now apparently policy down under: your virtual assets can be taxed. The Australian Tax Office (ATO) is warning citizens to consider whether their gaming 'is a hobby or a business' and act accordingly. From the article: "If a virtual transaction has real world implications — if it can be attributed a monetary value — it attracts the attention of the Tax Office. Sites such as slexchange.com set rates for swapping Second Life's Linden dollars for 'real' money. 'The real world value of a transaction may form part of your taxable income, even if it is in Linden dollars,' the ATO spokeswoman says. 'In addition, there may be GST (goods and services tax) to consider.' In other words, if you are turning over the equivalent of more than $50,000 selling virtual jewelery to Second Life avatars, you must get an ABN (Australian Business Number) and register for GST."

I support this

My income is taxed.

Regardless of what service you provide, you should also pay taxes. Give to Ceaser what is Ceasers.

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I agree, the business has to be turning over "more than $50,000", which is quite a lot of money really - they should pay the same as anyone else.

Other than that "Give to Ceaser what is Ceasers", I have one of his Denariuses - but he's been dead for 1800

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I have one of his Denariuses - but he's been dead for 1800 years, do I really have to give it back?

It's Holloween. Be careful what you wish for.

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Virtual currency should be taxed when, and only when, real-world currency is exchanged for it. Until such a point no taxable transaction takes place, since any goods exchanged between characters in-game remain the property of the game operator before, afte

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If you buy and sell stock online, is that virtual currency or "real" currency?

Better yet, what about commodities and futures! There you're not buying anything at all...

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When you buy stock or commodities, online or otherwise, their legal ownership changes hands from the previous owner to you. Likewise, buying futures represents a legal contract for a future exchange of legal ownership.

The issue I have with taxing purely

It doesn't really ma\tter

buying and selling stocks works the same way - you only pay the tax when the money is exchanged for the stocks (when they are bought or sold). You don't pay tax ever time a stock goes up, you only pay when you sell it.

Why should online money (Linden dollar

No, you don't (Re:I support this)

No, this is something different and stupid.
You'd support the government getting their cut when the "virtual" money is exchanged for real money. That's sensible. This issue is about treating in-game points (virtual money) WITHIN THE GAME, just because the

Yes, I do.

You realize, of course, that this isn't unusual, right?

If you bought a home in the 1920's in a rural area with 0 property tax, and now a city has grown around you, you are now expected to pay property tax. NOT at the cost that you bought it for, but at it'

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IDNRTF (I did not read the article). Are they discussing taxing in general or income tax? In order to tax income, you had to have gained something of monetary value. Like stocks, vitual assets have no value until you cash them in, so you should not be

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Indeed, if you bought a house in the 1920s, you'd have to pay property taxes today. These taxes would support city services, the road to your street, police to serve and protect, and a fire department for when your kids play with matches. The land and th

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I think that you've stumbled onto an excellent idea there... Game police. Where do I sign up?

I think that ultimately, I agree that if you make a living off of a game, you should pay taxes. Anything that EVENLY distributes the tax base is a good idea.

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Much better argument than mine. Excellent point.

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"Give to Ceaser what is Ceasers."

I do not think this means what you think it means. [praxeology.net] There might be his head and name on the coin, it does not make it his. All tax is theft, and is a sin.

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The "Caesar" Jesus was talking about wasn't Gaius Julius--that one died 40 or so years before Jesus was born.* It was Augustus.
*We know Caesar died on 44 BCE. We don't know when Jesus was born although most modern estimates are around 5-6 BCE.

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Ah, Augustus, the emporor that died in 14AD when Jesus was 16 or so. I think you might be thinking about Tiberius right there.

Well, that seems reasonable...

I wonder if I can pay taxes in World of Warcraft gold.

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Sure, we'll let you pay taxes in WOW gold. We'll let you write off donations to charitable causes such as,"The be nice to newbies fund." But if your account gets suspended, you still have to pay up and can't sue Blizzard. Thats right, a fate worse than

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Not only that, but our GST (like the UK VAT) only applies to transactions where the purchaser is a tax resident in Australia. Everybody on WOW / SL could simply say "I'm in California" and they're not eligible to pay our GST. This whole thing is unenforcea

like currency

Somehow I suspect the Australian tax authorities won't accept payment in Linden dollars. (I suppose it depends how much their MPs are into Second Life...)

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If they won't take payments in L$, you can go to www.slexchange.com - just like the article said - and convert it back to AUS$ - and then pay the tax man.

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That could actually be really bad. I've seen problems occur w/ that sort of transaction: The government assesses a levy in AU$ on your L$ income - but by the time you're ready to pay the levy, something happens to the exchange rate and you're toast.

This

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Usual disclaimer applies: Speculating/trading in [anything] carries a high risk to your capital. You may lose more than your initial deposit. Only speculate with funds that you can afford to lose. Understand the risks. Seek expert advice if necessary. .. y

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Bad analogy since poker is a game of skill

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Poker is just the same as trading...the majority lose money so the minority make money...Those skilled will take the money off of those less skilled.

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Judging from the numbers out of wallstreet...NO

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So, if you get permanently banned from Second Life as part of a guilt-by-association political move [3pointd.com], can you claim your L$ balance as a capital loss?

Timing of taxes

If you wait till later to pay the taxes currency changes can always get you.
Whenever you convert currency to calculate your gain/income, also convert enough of the asset to cover your tax liability.

You need to handle your L$ assets like any other foreign c

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Somehow I suspect they won't accept payment in USD either. Doesn't mean you don't have to pay taxes on income you get as USD.

It's still a real world transaction

It's still a real world transaction, so it shouldn't come as a surprise that it's taxable.

If you design graphic artwork for a website, you get taxed when you get paid for the work, even though it's not something designed to be used outside of the computer.

No, it's a virtual transaction with RL value!

Here's what I'm worried about:
If you sell a virtual necklace for 1000 virtual dollars, and those 1000 virtual dollars are worth $50 on the open real world market, then could you be taxed on that $50 regardless on whether you converted those 1000 vi

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Yes.

That's how taxation and earnings in foreign currencies work.

I'm in New Zealand. I do work for some clients in Australian Dollars. When the end of the year rolls around any Australian Dollars I retain (I have not exchanged) need to be declared in an e

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Well, if you're making a business out of it, and are required to get a business licence, you should be guarenteed the same protections as any other business. It's part of your livelyhood. If SL crashes, you're now out of income. Can this be applied to u

obligatory

first they take your guns... then they take what ever the hell they want.

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Bah I know! First my Corp taxes me and then the government does too! When will it end? :(
 
*Releax it is a joke!*

Ronnie said it best...

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. - Ronald Wilson Reagan

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Uh, yeah. If Ronnie said "it," I'm not sure it really needed to be said. All that much. I think that fucker still owes me and my kids $2.5 trillion.

having done a little bit of maths...

50,000 AU$ equates (based on Google's AU$->US$ conversion, and the current Purchase Rate estimate from the offical Lindex US$/L$ exchange) to somewhere over 10 Million L$. Figure is subject to drift of those exchange rates, but it gives you a decent eno

California Taxen uber alles?

Since Second Life is hosted in California, presumably no *actual* income is generated until Lindens are converted into $AU and downloaded into an account *in Australia* (or an account under the control of a citizen of Australia.)

This has interesting impl

Wow, real life income is taxed!!

This is so not news.

Life is hard, in Australia we must pay tax on all income derived in Australia and abroad. This includes the net.

If I trade virtual services for virtual money, all good; If I convert those virtual services or monies into ACTUAL money or

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TFA states "If a virtual transaction has real world implications -- if it can be attributed a monetary value ...." The point missed was by you Anonymous... the article clearly states that only transactions with real monetary value are taxed. If I buy in

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Why could they not? They already do the same thing with real world foreign currencies. Make money in US dollars, get taxed in Australian dollars. It happens all the time.

Interesting implications wrt minors

Would also make some interesting implications for family time, if the account is in your name and your kids are playing on it ...

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Finally, an up-to-date way to make money out of your kids. Hardly anybody in the developed world sends them out pickpocketting and chimney sweeping any more.

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>> ... otherwise it is taxation without representation, eh?
>>

No. The complaint about "taxation without representation" means something different entirely. The complaint was not that Britain didn't provide infrastructure in the colonies. They

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Not really. They're not involved until real money switches hands. Even though the product is not a tangable object how is this any different from being taxed for music, books, films or software I can download?

I would disagree with this move if the transfe

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Nope.

They are taxing the income of residents of Australia. Something that is perfectly within their sovereign power and perfectly logical.

It is perfectly standard for countries to tax the worldwide income of their residents. On the other hand, the US goes

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>> Sort of like taxing all the satellites that fly over Australia.

You have to pay the Goods & Services Tax on satellite TV in Australia.

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"Everyone owes and everyone pays." (Gangs of New York) It's seen as their right to take your money (tax you) since they provide services. The truth is, you could go your entire life without using a single one and it doesn't matter because they're going

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And you think that'd stop the statemen from stealing your income, illegal or not ? In my country prostitutes have to pay taxes, even though prostitution is still illegal.