China Reversed Ban, Imposes 20% Tax on Gold Farmers

[Everguide]

China Reverses Ban Imposes 20% tax on Gold Farmers

Only two years ago China "strictly forbid" players from making money trading virtual currencies. The statement wasn't enforced and gold farming continued to rise in the country.

Now the Financial Times has announced that China has announced a 20% tax on money made from trading virtual currencies.

I've never thought that prohibition worked very well (be it on alcohol, prostitution, war on drugs, etc). What do you see the future role of government (and maybe developer?) interaction in the emerging virtual game currency markets?

[Rikkum]

wow no way.

[Malakriss]

If you can't beat 'em, Tax 'em.

[Hatorade]

Wasn't this thing brought up when Second Life players were making 500K a year from selling in game goods? Never followed what happened after that but I think it was not taxable on the sale but the income ofcourse needed to be reported.

[Talineth]

If you as a company don't want this sort of behavior, then you're just going to have to offer it as a service yourself!

[Istros]

this is how you do capitalism. props to our soon-to-be Chinese overlords

[Troll]

Originally Posted by Malakriss

If you can't beat 'em, Tax 'em.

(You can still beat em after you take their money.)

[Lost Ranger]

Wonder if we will even notice this. I still get a dozen spam tells for gold every day.

[mek]

The spam will be the same, the price will be 25% higher. :P

[Qhue]

Exactly how does one manage to collect such a tax?

[bitch are your retarded?]

Originally Posted by Qhue

Exactly how does one manage to collect such a tax?

The same way any government collects other taxable forms of income?

[Qhue]

Originally Posted by bitch are your retarded?

The same way any government collects other taxable forms of income?

Please forgive my naivete but Im still picturing gold farmers as being either a single individual / family unit operating a very small enterprise or a very shady sweat-shop sort of operation. Both existing very much as part of the shadow economy of under-the-table unreported income.

I look at how until very recently in America even mainstream online retailers like Amazon managed to avoid collecting and processing state and local sales taxes on literally millions of dollars of transactions. If giant engines of commerce like that can fly under the tax-radar what hope is there of actually catching and collecting taxes from such a nebulous and poorly understood industry as virtual item manufacturing?

Or is this merely a proxy tool which the central government can use to prosecute gold farmers when they choose to do so? (i.e. getting them on tax evasion charges since there are no other laws regulating the business)

[Northerner]

China has stronger disincentives in comparison to the US or other countries (Hi!~ We kill you and your family now kk?) but it'll still be a hard thing to pull off. It is almost certainly just a shot across the bow at this point but the potential is interesting.

I look forward to them using prisoners to produce online gold frankly.

[CnCGOD]

WE kill you now and charge your family for the cost of killing you... now THAT is a deturrent.

[Mazim]

Originally Posted by Qhue

Please forgive my naivete but Im still picturing gold farmers as being either a single individual / family unit operating a very small enterprise or a very shady sweat-shop sort of operation. Both existing very much as part of the shadow economy of under-the-table unreported income.

When I sold my character, to a well established, not well known company, I called the bank to make sure the check was good. In the process the teller happened to mention the account balance. Very illegal. It was 6 figures, and a lot more then most small businesses keep in their payroll accounts.