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BabeLove
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Posted - 2006.03.25 15:35:00 -
[1]
I was reading this thread; Link here and i thought, since a game like Project Entropia virtual money as a direct Real Life value (10 Ped is worth 1$ US if i remember right), virtual money that you can cash in anytime you want, and since it's possible to make money in project entropia (like finding an ore deposit, some are worth over 100k Ped i.e 10000$ US) isn't it likely that PE virtual cash will sooner or later be taxed?
If it happens for PE, wouldn't that be an open door for taxation of virtual money in all other MMORPGs??
But then, how will this happen, each country will tax their citizens that are playing MMORPG? would MMORPG be obligated to send each country governments a list of the player database?
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Synex
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Posted - 2006.03.25 15:56:00 -
[2]
Just like any added income over a certain limit, the RL-cash income that you get from the game should be declared on your tax-return. But this would only happen when you took the money out of the game and into your RL bank account.
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Alexis DeTocqueville
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Posted - 2006.03.25 16:01:00 -
[3]
Edited by: Alexis DeTocqueville on 25/03/2006 16:01:18
No, because virtual selling of items (which implies that they are in fact assets with real-world value) is verboten under most EULA's because companies assert that the virtual items are intellectual property. Hence you've acquired no actual assets. The fact that the item can be sold in real life for $$$ is irrelevant since if you're selling it, it's technically stolen goods.
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Snake Jankins
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Posted - 2006.03.25 16:08:00 -
[4]
Edited by: Snake Jankins on 25/03/2006 16:09:02
I think it becomes possible for mmorpgs, where these trades are allowed. It's a billion dollar market world-wide.
Imho they could only tax me, when I sell something in RL. But I'm not allowed to in EVE and I don't.
If someone wanted a tax for my isk in EVE, I'd argue, that I'm not allowed to make money with it in RL and that this virtual property is not mine but CCPs. Once the server shuts down forever, it's gone anyway.
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'Only ships can be assembled, this is a Frigate.' |
Baldour Ngarr
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Posted - 2006.03.25 16:40:00 -
[5]
 Originally by: Alexis DeTocqueville
Edited by: Alexis DeTocqueville on 25/03/2006 16:01:18
No, because virtual selling of items (which implies that they are in fact assets with real-world value) is verboten under most EULA's because companies assert that the virtual items are intellectual property. Hence you've acquired no actual assets. The fact that the item can be sold in real life for $$$ is irrelevant since if you're selling it, it's technically stolen goods.
The income from selling stolen goods is taxable. The fact that the sale of them is illegal, doesn't alter that.
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"I tried strip mining, but I lost, and it's cold flying around in space naked." |
Kel Shek
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Posted - 2006.03.25 17:05:00 -
[6]
honestly if I were ever to get into serious making money off of a game, ( more than like, paying for game time with ISK) it'd only be in legitimate ways, that is when its allowed by the developers, and if it happened to be enough for me to live on(theoretically possible) I'd probably make a point to actually report it.
I mean why give "them" a opening to screw ya around?
~~~~~
To see a World in a Grain of Sand
And Heaven in a Wild Flower
Hold Infinity in the palm of your hand
And Eternity in an hour
~~William Blake |
Alexis DeTocqueville
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Posted - 2006.03.25 17:10:00 -
[7]
Originally by: Baldour Ngarr
The income from selling stolen goods is taxable. The fact that the sale of them is illegal, doesn't alter that.
The income derived from a trade is taxable. Standard U.S. law says that all assets can be construed as income even prior to their exchange for federal reserve notes of exchange. But my point here is that since CCP and every other MMORPG company still retain their property rights on said virtual items, a pre-emptive tax is not legally valid.
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Gierling
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Posted - 2006.03.25 17:51:00 -
[8]
Yeahp, thank the 16th amendment on that. Income was originally defined as "Profit accumulated from leases and rents of properties", so when they proposed a tax on "Income" they played it up as a way to really stick it to the rich (who had a much higher rate of propery ownership, and property ownership for commercial use).
However once the amendment was (dubiously) passed the definition of Income was expanded to include "Profits derived from labor and activity" a category that precedingly had been known legally as "Wages" and was distinct from Income in the legal sense.
Moral of the story: Don't ever agree to a tax on anything.
PRoposal to fix blobbing and make Charisma useful.
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Girdan Keirge
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Posted - 2006.03.25 18:52:00 -
[9]
There are a few games that actively allow exchanging of game currency for virtual currency.
'Second Life' comes to mind.
It's a free-form 3D environment that allows players to create their own objects and retain the IP rights to them.
Players create businesses to sell their cars, clothes, houses, guns, avatar skins, jewlery, and whatever else you can think of for game currency, the Linden, and are allowed to convert it to $US by selling to other players on an open market.
You can also buy and sell virtual land to build a house or business.
A few players actually make a living wage from the items they sell and do not have any other job.
I believe most players that actually make money each month convert it to pay for their subscription and land use fees, which can be anywhere from $US 9.95 per month for a basic account to several hundred $US per month for large parcels of land.
The $L currently exchanges for about $L 280 for $US 1.
It's certainly not a 'get rich quick' scheme, but a creative casual player could easily earn some supplimental income there.
I believe the limit for conversion is $US 2000 per month for basic players, but there are additional tiers for large business owners which, as far as I know, are not publically divulged.
I don't know what they do about taxes though.
Since players can convert currencies, they are definately making income from their intellectial virtual property and would be subject to taxation.
I've dabbled with it for a month or so and enjoy the social side of it, mostly spending time in some casinos and playing slingo, so I've never exchanged any currency, nor really plan to as I won't be running a business.
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Mak'shar Karrde
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Posted - 2006.03.25 20:21:00 -
[10]
If all your stuff is stored on a server located in London then does the U.S. constitution have any relevance? (I don't know the answer).
If you believe initial reports, then the taxman already has his eyes on our virtual assets (and not only those traded out-of-game for real currency). I don't expect them to miss a trick. They've already added tax onto the price of an MMOG subscription (in the EU anyway). They've seen and read the same stories as all of us concerning people who make a living playing MMOG's.
Here is one article that I believe attempts to explain the situation.
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Wrangler
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Posted - 2006.03.25 21:21:00 -
[11]
I personally feel the real life world and game world should be completely separate. And even if that changes, I pay enough taxes already. 
[Read the Rules!] - [Contact us] |
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Baldour Ngarr
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Posted - 2006.03.26 05:31:00 -
[12]
Originally by: Mak'shar Karrde
Edited by: Mak''shar Karrde on 25/03/2006 20:50:20
Edited by: Mak''shar Karrde on 25/03/2006 20:49:19
If all your stuff is stored on a server located in London then does the U.S. constitution have any relevance? (I don't know the answer).
Since British people, living in Britain, and selling a house in Britain, have on occasion been forced to pay tax on the profits to the IRS, I'd say yes it does.
More relevantly to the case at hand - if a person who pays US income tax were to receive IRL money in exchange for EVE property:
(1) They'd be in breach of the EULA and subject to a game ban at CCP's discretion;
(2) They would NOT be committing an illegal act (just a disallowed-by-the-game one); and
(3) The IRS will want tax on the money received.
My understanding is that the IRS consider absolutely any form of money coming into your possession for any reason, as "income." I know they tax gambling winnings, which can't even be seen from the definition of "income," it's that far away. I think it's a safe bet that if you were receiving money as a result of playing EVE, they'd want their piece of it.
In the UK, you might be able to twist the definitions enough to consider in-game-derived profits to be a form of gambling (you put your battleship at risk to kill and loot that T2-stocked HAC, after all) ... so you might get away with it. You might not. I have no idea what tax laws apply in any other country.
________________________________________________
"I tried strip mining, but I lost, and it's cold flying around in space naked." |
aeti
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Posted - 2006.03.26 05:33:00 -
[13]
Originally by: Baldour Ngarr
Since British people, living in Britain, and selling a house in Britain, have on occasion been forced to pay tax on the profits to the IRS, I'd say yes it does.
err?
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Alexis DeTocqueville
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Posted - 2006.03.26 05:43:00 -
[14]
Originally by: Mak'shar Karrde
Edited by: Mak''shar Karrde on 25/03/2006 20:50:20
Edited by: Mak''shar Karrde on 25/03/2006 20:49:19
If all your stuff is stored on a server located in London then does the U.S. constitution have any relevance? (I don't know the answer).
U.S. citizens are required to pay taxes on income acquired anywhere in the world, regardless of the jursidiction of american authorities.
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Mike Moss
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Posted - 2006.03.26 05:47:00 -
[15]
Much like the old moonshine days. Illegal alcohol could be sold to willing buyers, but the proceeds were taxable. The "Rev'enoo'rs" would eventually hunt down the illegal distillers and runners for non-payment of taxes.
Same thing will happen with online sales of virtual property once governments realize that there it is worth the effort.
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Viktor Fyretracker
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Posted - 2006.03.26 06:57:00 -
[16]
Originally by: Alexis DeTocqueville
Originally by: Mak'shar Karrde
Edited by: Mak''shar Karrde on 25/03/2006 20:50:20
Edited by: Mak''shar Karrde on 25/03/2006 20:49:19
If all your stuff is stored on a server located in London then does the U.S. constitution have any relevance? (I don't know the answer).
U.S. citizens are required to pay taxes on income acquired anywhere in the world, regardless of the jursidiction of american authorities.
only if the money is coming back into the US, however if you make money in the UK and keep it in a british bank you are still liable for their tax laws. however if the money is made on "US Soil"(such as an embassy or military base i think US tax laws apply outside of country).
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Rellik B00n
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Posted - 2006.03.26 08:59:00 -
[17]
Edited by: Rellik B00n on 26/03/2006 09:01:02
Originally by: aeti
Originally by: Baldour Ngarr
Since British people, living in Britain, and selling a house in Britain, have on occasion been forced to pay tax on the profits to the IRS, I'd say yes it does.
err?
errrrrrrrr? USA may be hell bent on world domination but they arent that far along yet! 
I would dearly love to see evidence that a Brit was forced to pay yank taxes cause I think the public at large here might have a word or two to say about that.
.
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Denzar Matgul
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Posted - 2006.03.26 11:22:00 -
[18]
Originally by: Baldour Ngarr
Since British people, living in Britain, and selling a house in Britain, have on occasion been forced to pay tax on the profits to the IRS, I'd say yes it does.
Unless you are omitting some crucial point that makes this situation any of the us's business, then I respectfully suggest you are mistaken. 
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Hillesumos
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Posted - 2006.03.26 11:28:00 -
[19]
Dear All,
This game is already taxed pretty nicely: VAT for europeans on buying the game or subscription, taxs on salary of CCP employees and profit of CCP company.....
It is true that currently mmorpg are not taxed per se but when the economic and the value of the game get more important it will soon be more taxed because governments always find ways to tax new income generation process. Sure CCP made a good system to avoid the in game taxation issue but other games might be taxed and CCP be an unsuspecting collateral taxed company. Frankly the more I play the economic side of the game the more it feel like a real economic activity, some of the tech2 manufacturer websites almost look like true RL commercial site.....
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Sadly I just make ISK, I don't print it. :(
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