October 17, 2006 at 18:27Virtual Worlds Attract Tax Inspection
The economy of virtual worlds (MMOG) is growing rapidly. The number of inhabitants of alternative universes is estimated at tens of millions of people . These people not only pay a monthly fee, but also invest heavily in the development of their character, the purchase of virtual real estate and other virtual goods. Some of them even manage to profit from their investments.
Last year, the volume of the online games market reached $ 3.4 billion , and by 2010 it should grow to $ 13 billion. A significant part of this amount is the currency turnover in the game worlds. Very often, such a currency can be cashed at an official or clandestine exchange office.
From now on, any American who exchanged game currency for real dollars,obligated to reflect this in his income statement .
The issue of virtual economies is considered by the economic committee at the US Congress. They are now discussing what kind of economic relations from the real world are applicable to virtual economies. For example, standard taxes on profits, real estate, fortune, etc., can apply to virtual worlds. Perhaps the tax authorities will have to agree with the developers of the games on the exchange of information.
Indeed, this question is now very relevant. The economies of virtual worlds can easily transfer hundreds of thousands of dollars there and make a profit in game currency from investments in virtual real estate. If necessary, the currency is quickly converted into dollars. Moreover, all of the businessman’s economic activity is beyond the control of financial authorities. A person does not pay the state any taxes.
The financial turnover of some virtual worlds has already exceeded the size of the gross domestic product of many small countries of the world. For example, in Second Life, the monthly transaction amount has already exceeded $ 7 million and continues to increase by 10-15% per month. Tax authorities do not have the right to ignore these financial flows. But how to regulate them is not yet entirely clear.
Last year, the volume of the online games market reached $ 3.4 billion , and by 2010 it should grow to $ 13 billion. A significant part of this amount is the currency turnover in the game worlds. Very often, such a currency can be cashed at an official or clandestine exchange office.
From now on, any American who exchanged game currency for real dollars,obligated to reflect this in his income statement .
The issue of virtual economies is considered by the economic committee at the US Congress. They are now discussing what kind of economic relations from the real world are applicable to virtual economies. For example, standard taxes on profits, real estate, fortune, etc., can apply to virtual worlds. Perhaps the tax authorities will have to agree with the developers of the games on the exchange of information.
Indeed, this question is now very relevant. The economies of virtual worlds can easily transfer hundreds of thousands of dollars there and make a profit in game currency from investments in virtual real estate. If necessary, the currency is quickly converted into dollars. Moreover, all of the businessman’s economic activity is beyond the control of financial authorities. A person does not pay the state any taxes.
The financial turnover of some virtual worlds has already exceeded the size of the gross domestic product of many small countries of the world. For example, in Second Life, the monthly transaction amount has already exceeded $ 7 million and continues to increase by 10-15% per month. Tax authorities do not have the right to ignore these financial flows. But how to regulate them is not yet entirely clear.