Archive for the 'Taxes' Category

Second Life Financial News

November 26th, 2007 | Category: Banking, Second Life Money, Stock Exchanges, Taxes, Virtual Economy

From: Your 2nd Place Taxes……does that mean refunds? Quote from the site - You know I was sitting in the Emergency Room with my mom at hmmmm 3a.m. this morning….reading an August edition of Time magazine. Flipping through the pages I see, oh what do you know?….an article about Second Life….Second life and taxes…..I do not recall (famous last words) the dollar amount they say people made in Second Life……and if the government should tax those monies….well I for one hope they do!

From: Second Life Herald Midas Bank Insolvent - Trouble On The WSE Quote from the site - While there have been some concern about Midas Bank’s financials, no public signs of trouble occurred until November 2nd. Midas Commons released a notecard stating that an interest payment that was due on Hope Capital Bonds (HCB) was not paid. Midas reported having L$3.5 million invested in HCB. The Second Life Exchange Commission reports that L$650,000 was owed to Midas Bank as the interest payment on their HCB holdings.

From: Orient Lodge Commodity Trading, Coming to Second Life Quote from the site - Quanta was planning to set up a bank in Second Life where the deposits where backed by gold bullion at The Bullion Vault in Zurich. I’ve been interested in watching commodity trading coming into Second Life. I had a great discussion about this with Quanta when he first bought the land and I’ve been waiting for the next developments.

From: SLOz World Stock Exchange facing legal problems? Quote from the site - The Second Life Herald are running a story on the Midas Bank saga, alleging that Midas have done some legal investigations around their issues with the World Stock Exchange, run by Australian Luke Connell (LukeConnell Vandeverre).

From: Looker Lumet New Second Life “SLURRENCY EXCHANGE” to offer best rates, preferred programs. Quote from the site - Virtual world developer announced their new ventureinto the world of Second Life currency exchanges, with the openingof the SLURRENCY EXCHANGE,whose main office is located on theSimuality island

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No New Taxes on Virtual World Earnings….Yet

October 09th, 2007 | Category: Doing Business in SL, Taxes

In yesterdays Metanomics session with Dan Miller, Dan said that Congress is not looking to impose taxes on virtual earnings, and he said that they would thrive and develop without taxes, which echoed what Jim Saxton said last year when he said taxing virtual economies would be a mistake.

The senior economist for Congress’ Joint Economic Committee sent a few signals about the its long-awaited report on virtual world taxation in a Second Life appearance on Monday.

“We are not looking to impose taxes,” Miller told a packed house at the Metanomics session. “In my opinion the less government regulation you have on virtual worlds, the more they’ll thrive and develop.”

Miller’s statement echoed the position of committee’s then-chairman, Rep. Jim Saxton (R-NJ), who said last year that taxing virtual economies “would be a mistake.” Source: Congress to Second Life: No new taxes?

But, he did say, the final word on taxing virtual worlds like Second Life may not come from Congress, but from the IRS who could decide that even though the money may not be “real” it could be considered a barter exchange and taxable under IRS topic 420.

If you missed it, like me, you can view the archived video at Playing Metanomics :: US Congress Looks at the Metaverse on the Second Life Cable Network. The folks at metaversed will also be uploading to here soon, so check there as well.

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HM Revenue & Customs Spying On Avatars?

August 28th, 2007 | Category: Taxes

In an article on PC Advisor, it is being reported that HM Revenue & Customs, the IRS for the UK, is spying on avatars who are possible tax evaders. They are even watching trading of items, saying that even if no Lindens are involved, you could still be taxed on the gain, or profit.

This follows earlier news that online gamers and community dwellers are on the taxman’s hit list. And it’s not just real-money profits being spied on. The Revenue said it will target even virtual profits: “Even if there is no cash transaction you could still be taxed on the profit or gain. The virtual aspect is a red herring. If someone is running a business, then they are required to register with us and pay tax on that business.”

Tax inspectors are using Xenon, a new high-tech snooper computer system, to scan the site, which has 35,000 regular users in the UK. Xenon is also being used to identify people making money from eBay and other auction sites. Source: Second Life players spied on by government

They mention that some start earning Lindens as fun and don’t realize they have to pay taxes on them, but the avatars they are looking at, are the ones who are running businesses, reminding them that they still have to pay taxes on their virtual profit. They had given avatars amnesty, saying that if you declare your profits now you would avoid paying up to 100% penalties on top of the monies owed, but the amnesty ran out on June 22.

I’m sure this isn’t the last we will hear about this.

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Two Certainties in Second Life?

July 06th, 2007 | Category: Taxes

We all know the old saying that in life there are two certainties, death and taxes, but what about Second Life? Well, South Korea is taking care of one, they are going to start tacking on a value add tax, or VAT, to all real money transactions in virtual worlds beginning July 1.

Sellers who do between 6 and 12 million won [~$6,500 - $13,000]/half year in business will have VAT auto applied by transaction’s middle-man
Sellers who do more than 12 million won/half year in business will need a business license and will pay the tax by themselves Source: South Korea to Tax Virtual Assets

But, who will be responsible, really? Most game terms of service stat that in game items and currency belong to them, in SL, users retain the rights to their avatars and digital content, so, I guess all you South Korean Linden millionaires are going to loose some more to taxes starting this month. It will be interesting as more and more money changes hands in virtual worlds to see what governments will do to get their hands on it.

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