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South Korea Now Officially Taxing Virtual Worlds

Zonk posted more than 6 years ago | from the i-see-that-sword-pay-up-you-tax-dodger dept.

Role Playing (Games) 70

Next Generation is reporting that the South Korean government's goal to get their cut of the real money transfer industry is now in the works. Folks who sell over $6,500 worth of virtual goods or currency in a given year will have an automatic Value Added Tax (VAT) withdrawn by the service they contract through. That is, the middleman service will remove taxes automatically for these repeat customers. If a South Korean sells over $13,000 worth of goods or currency in a given year, the government considers them a small business. As such, individuals in that position are required to obtain a business license and take care of taxes themselves. "An NTS official claims the organization will be able to monitor all transactions as RTM mediators have agreed to share clients' transaction details with the authorities. 'NTS would be able to track all transactions for taxation of virtual items,' Mr. Choi said. 'This is not about defining RMT legal/illegal; we don't see any contradictory facts to Amendment for Game Industry Promoting Law - we are not about to judge if RMT is legal or not,' he added."

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70 comments

No, they're not (5, Informative)

faloi (738831) | more than 6 years ago | (#19721025)

They're taxing real money that people make for selling virtual goods.

Re:No, they're not (1)

Lockejaw (955650) | more than 6 years ago | (#19721055)

Good to have that pointed out early. Really, this isn't much different from any other tax: real money changes hands, and the government takes a cut.

Re:No, they're not (3, Insightful)

east coast (590680) | more than 6 years ago | (#19721307)

Good to have that pointed out early.

That won't matter. We're still going to have 80 14 year olds crying that they're being put down "by the man" and explaining that this is nothing new (as far as taxation goes, at least) is going to do nothing but have them calling you a governmental shill.

Re:No, they're not (0, Flamebait)

gad_zuki! (70830) | more than 6 years ago | (#19722223)

We're still going to have 80 14 year olds crying that they're being put down "by the man"

Hello. Welcome to slashdot!

Re:No, they're not (1)

SatanicPuppy (611928) | more than 6 years ago | (#19722259)

It wouldn't be an issue if we didn't still have all the fricking flamebait headlines. Every SINGLE time this issue comes up, the headline is always "Someone is taxing virtual worlds" and in every single case that is woefully incorrect.

Re:No, they're not (1)

Impy the Impiuos Imp (442658) | more than 6 years ago | (#19722269)

> Good to have that pointed out early. Really, this isn't much different from any other
> tax: real money changes hands, and the government takes a cut.

Mr Sarcasm says: Really, this isn't much different from any other protection racket: real money changes hands, and the mob takes a cut.

In exchange for not...is it hurting or jailing you? Oh, yeah. You have a 0.0000001% change of affecting your tax situation, making you much more powerful with respect to the mafia situation.

Re:No, they're not (1)

Verteiron (224042) | more than 6 years ago | (#19721091)

A better article headline might be "South Korea making sure sales tax applies to virtual goods sold for real money" but that wouldn't be as inflammatory and probably wouldn't fit anyway.

Re:No, they're not (1)

djasbestos (1035410) | more than 6 years ago | (#19730761)

How about "South Korea taxes domestic sales involving its official currency"? That's pretty generic (yet accurate).

I don't see how it's any different from taxing Ebay sales...I'm not exactly fond of the idea, but it's the same. If you buy something in USD, I'd expect that a USD tax could be applied to it, assuming it's bought within US jurisdiction. Same goes for Korea. I agree that the topic title is inflammatory...but if cash money is exchanging hands (not just Lindens or Gold Pieces or credits), the government will certainly want a share.

Re:No, they're not (1)

NoobHunter (1090113) | more than 6 years ago | (#19721171)

I don't get it... I expect stuff like this from Newspapers....but /. ? Maybe I'm missing something but are articles weighted on how may people click on them?

Actually, on the contrary (5, Insightful)

Moraelin (679338) | more than 6 years ago | (#19721989)

I don't get it... I expect stuff like this from Newspapers....but /. ? Maybe I'm missing something but are articles weighted on how may people click on them?


Actually the exact opposite is probably true. Most newspapers, at least in the western world, discovered around the start of the 20'th century that it pays to at least pretend to be impartial. Yes, they still aren't really impartial, and they still kept their opinion columns (although at least now they're more or less marked as such, and not as hard news) but they're a lot more subtle in their manipulation than that.

It's not even as much doing the morally right thing, it's just business. At some point the public as a whole was largely fed up with the hyperbole- and libel-ladden pieces of journalism and pamphlets of the 19'th century. So someone discovered, much to their surprise, that they actually have more readers if they just report the news, instead of fabricating it or outright telling people what to think about it.

Again, I'm aware it's still nowhere near perfect, and even "impartiality" means something slightly different to the media than to the rest of us. I'm not entirely naive, trust me. I'm just saying it used to be a lot worse. "Protocols of the Elders Of Zion" kinda bad, or claiming that Lincoln was at the head of some subversive African conspiracy. Inventing ridiculous super-villain-type plans of your opponents (e.g., that they're actually proposing building sewers or a subway so they can blow their own capital up from below, when their Illuminati masters order it) used to be just business as usual.

At any rate, nowadays an actual printed newspaper would be a lot less blatantly inflammatory there. Even if they wanted to manipulate you into being for or against it (which actually newspapers themselves don't often do, but is often is the case with PR pieces submitted as news), they'd work hard into making it look like they just gave you the data and you reached the "whoa, it's evil" conclusion yourself. Especially in PR there are people damn skilled at _not_ looking blatantly partisan. It would involve some interviews, some impartial study maybe, and in "journalistic impartiality" tradition it would involve two conflicting points of view, and they're not telling you which of the two to believe. (Just incidentally the one pro-taxing ends up saying the wrong things, and causing a "well, I'm not siding with _this_ guy" reaction.)

Unfortunately, (or maybe fortunately, you can choose) Slashdot stories are rarely submitted by real journalists. They're _usually_ submitted by nerds who never figured the "pretend to not tell people what to think" part, so they outright go ahead and do that. Some (though not all) even have an axe to grind, an ideological crusade to fight, and a messiah complex to save you all from the evil corporations/government/current-economic-model/wha tever. So, yeah, expect inflammatory stuff like this.

It's not like it's the first time anything like this happened, anyway.

Re:Actually, on the contrary (1)

bit01 (644603) | more than 6 years ago | (#19723395)

They're _usually_ submitted by nerds

No, they're usually submitted by marketers. They fraudulently astroturf wholesale in the comments as well.

You just need to look at the quantity of "product announcements" before products are even released to see that.

Vista and iPhone are recent examples. Practically daily content-free propaganda, sorry "stories", for months beforehand.

---

Paid marketers are the worst zealots.

Re:Actually, on the contrary (1)

Moraelin (679338) | more than 6 years ago | (#19723507)

Well, there probably is a lot of that too, but I'm left scratching my head what would someone actually want to sell via _some_ of the stories. Take this one, for example. Whose marketter is trying to paint the South Korean government in a bad light, and exactly what are they selling, anyway?

The gold farmers make less than 1$ per hour, last I've read about it, so they're not quite in a position to hire a good PR firm and manufacture news.

Plus, their interests are better served by other kinds of articles, like the recently linked NYT article that painted the gold farmers in such a positive light (you know, just poor hard-working guys trying to make a living) and as being the poor victims of mean players who gank them on sight. It even managed to present a situation that was clear-cut botting unattended (i.e., blatantly breaking the TOS and one thing that's pretty justified in causing a negative reaction), _and_ it was farming quest NPCs unattended at that (so, you know, even in the short term it was hindering players who needed them for the quest and for the rep to even have access to an area)... as some case where evil self-righteous players victimized the poor Chinese gold farmer. So, anyway, if I were a gold farmer I'd submit links to more articles like that.

Anyway, I didn't say that _all_ stories were submitted by nerds. I think the more inflammatory and blatantly lopsided ones are, though. A proper PR agency should know better than that. And, frankly, if MS or Apple can't afford professional PR guys, I'd start worrying about them :P

Finally, don't underestimate genuine fanboyism. Assuming that people need to be paid, or to be part of some conspiracy, to do something stupid and/or annoying is rather false.

Re:No, they're not (1)

mikael (484) | more than 6 years ago | (#19724119)

I don't get it... I expect stuff like this from Newspapers....but /. ? Maybe I'm missing something but are articles weighted on how may people click on them?

As an editor on a national newspaper once told his journalists: "never let the facts get in the way of a good story"

Re:No, they're not (0)

Anonymous Coward | more than 6 years ago | (#19721309)

And it looks like they set the bar high enough that it only begins to effect you if you plan to make a small business out of it rather than just dumping some extra gold/plat whatever to buy yourself a 360.

Re:No, they're not (1)

Grifty (939983) | more than 6 years ago | (#19729939)

That is a good point.

The casual player that wants to "cash out" does not have nearly the same impact as a farming business.
However, the ability to cash out so easily often leads players to take on the same unscrupulous practices as the farmers.

This includes camping spawns unattended, scripting easily repeatable (profitable) actions, and (as mentioned elsewhere) hogging resources and/or NPCs needed by other players that are actually PLAYING the game.

Anything that discourages actions which impede legitimate players is a step in the right direction.

Re:No, they're not (1)

include($dysmas) (729935) | more than 6 years ago | (#19723521)

all together now, slashdot editors : sort your shit out!!

can we please have the informative, often funny, geek news site back? less of the flame inspring / woefully incorrect / press release bullshit!

Re:No, they're not (1)

Vee Schade (6806) | more than 6 years ago | (#19730857)

Actually, they're taxing the sale of virtual goods for real money, not the money itself. "Income tax" is not a tax on "income", but a tax on the /source/ of income (or activity which produced it), for which "income" serves only as the measuring stick for the tax.

Exactly how it should be handled.... (3, Insightful)

MaineCoon (12585) | more than 6 years ago | (#19721069)

... and frankly, US tax law already handles the situation, but it is up to the individual to report their income.

South Korea simply made a law that requires the transaction service being used to apply the tax.

Re:Exactly how it should be handled.... (1)

voice_of_all_reason (926702) | more than 6 years ago | (#19721195)

... and frankly, US tax law already handles the situation, but it is up to the individual to report their income

However, that is largely unenforceable. Hence why stories such as this _are_ news.

Re:Exactly how it should be handled.... (2, Insightful)

AuMatar (183847) | more than 6 years ago | (#19721273)

Not really. If you're making a few hundred a year, sure. But in that case the government doesn't give a shit, it isn't worth its time. If you're making a few thousands or tens of thousands, you run a risk of being caught and prosecuted. In this bracket, its not worth the risk of not reporting.

Re:Exactly how it should be handled.... (3, Informative)

Muki61 (123481) | more than 6 years ago | (#19722331)

Actually, US tax law does not cover the situation. You are confusing two different taxes. VAT is not the same as income tax. VAT is similar to sales tax, not income tax. US tax law does not currently have a sales tax for internet sales, unless the seller has a place of business in the buyers tax area. But yes, if the seller makes income on the sale, they do have to report and pay income tax.

Re:Exactly how it should be handled.... (1)

yada21 (1042762) | more than 6 years ago | (#19722755)

Actually, US tax law does not cover the situation. [snip] if the seller makes income on the sale, they do have to report and pay income tax.
Unless income tax runs some kind of honor system these days, it sounds like the law does cover it.

Re:Exactly how it should be handled.... (2)

Harik (4023) | more than 6 years ago | (#19723505)

Congrats, you successfully managed to snip out the part where he pointed out that the VAT (what's being enforced in South Korea) isn't the same as Income Tax like we have in the US. It's a sales tax.

Your post is like where you take a car and drop out the engine and wonder why it doesn't work! There, an analogy!

Re:Exactly how it should be handled.... (1)

yada21 (1042762) | more than 6 years ago | (#19741151)

On what grounds do you assume I don't know the difference? GP said US tax law, he didn't specify what kinfd of tax, and then contradicted himself.

terms of services and middle-man (1)

Joe The Dragon (967727) | more than 6 years ago | (#19721145)

The terms of services say the items and currency = $0 and the taxes are applied by middle-man?
so if you use ebay that you don't have to pay the tax?
also what games like Second Life where you buy and sell from the people running / making the game with out a middle man?

Re:terms of services and middle-man (1)

Thansal (999464) | more than 6 years ago | (#19721245)

ebay would basicly be the middle man in this.

And in second life the ingame cash has a real world value (if I remember correctly), and thus that would be income/investments/net worth.

All this is doing is enforcing income tax. They sell something for $$, and the govn't taxes the transaction.

Re:terms of services and middle-man (1)

Joe The Dragon (967727) | more than 6 years ago | (#19721289)

Does the South Korean IRS tax you on ebay sales?
also for a small business can you wire off the costs of playing the game?

Re:terms of services and middle-man (1)

EMeta (860558) | more than 6 years ago | (#19721285)

In the eyes of most governmental revenue agencies, value of goods sold = amount that was paid for them. If you use eBay, like if you sell in the US, you are required to declare the income yourself. The law just made it mandatory for middleman services to facilitate this taxation. Should anyone selling more than $6500 of a type of good have tax on it? I suppose that question is debatable, but I'd rather see these gaming goods taxed than higher taxes on food or say, my income.

In Communist North Korea.... (1)

sokoban (142301) | more than 6 years ago | (#19721201)

Virtual worlds are now officially taxing you!

Re:In Communist North Korea.... (1)

Howitzer86 (964585) | more than 6 years ago | (#19721933)

What a stupid joke.

In North Korea, if you are so much as caught with an unauthorized radio, you are as good as dead.

I doubt a North Korean could get access to a computer unless it was part of his job. And if so, then he had better use it for that job and nothing else. Attempting contact the outside world in any way is treason.

Re:In Communist North Korea.... (1)

DigiShaman (671371) | more than 6 years ago | (#19722929)

Correct.

Not only would you be executed, but your immediate family and relatives would be killed as a lesson to others. Unluckier still, get sent to a concentration camp.

I know the parent was trying to be funny, but N. Korea is truely hell on earth!

Should I RTFA? (1)

Sciros (986030) | more than 6 years ago | (#19721217)

Maybe I missed something, but...

[this] is not about defining RMT legal/illegal

Ummm.. can you tax illegal money transfer? And, like, imprison a thief for tax evasion along with, say, robbery? If they're taxing it, doesn't it HAVE to be legal?

Re:Should I RTFA? (3, Informative)

Lordpidey (942444) | more than 6 years ago | (#19721293)

Al Capone wasn't arrested for bootlegging, but for not paying taxes.

Re:Should I RTFA? (1)

WrongSizeGlass (838941) | more than 6 years ago | (#19721579)

Al Capone wasn't arrested for bootlegging, but for not paying taxes.
Let's see here - that is a tough decision. Booze or taxes ... booze or taxes ... I guess I'll have to flip a coin. ;-)

Re:Should I RTFA? (1)

Lord_Pain (165272) | more than 6 years ago | (#19721475)

In the US the answer is yes.

You may want to checkout Tax Evasion issues that Organized Crime deals with.
Heck, Al Capone got nailed with Tax Evasion.

Re:Should I RTFA? (1)

Impy the Impiuos Imp (442658) | more than 6 years ago | (#19722299)

One of the things the government likes to add to the list of charges are that you didn't buy your marijuana tax stamps.

And, ironically, you are supposed to be able to go down to the post office (or somewhere) and be able to buy them, no questions asked.

Re:Should I RTFA? (1)

Derekloffin (741455) | more than 6 years ago | (#19721493)

If they're taxing it, doesn't it HAVE to be legal?

Nope, the IRS explicitly says that any money you get, legal or illegal, must be reported and can be taxed. It's just one of those ways governments have of artificially increasing the severity of the charges against someone.

Re:Should I RTFA? (1)

Sobrique (543255) | more than 6 years ago | (#19727881)

In the UK, the 'proceeds of crime' act allows the government to sieze anything gained from illegal activity. Of course, then they have to demonstrate it's illegality first, rather than just pretend it might be legal, and tax normally :).

Re:Should I RTFA? (1)

WaXHeLL (452463) | more than 6 years ago | (#19721495)

Ummm.. can you tax illegal money transfer? And, like, imprison a thief for tax evasion along with, say, robbery? If they're taxing it, doesn't it HAVE to be legal?


No. The IRS rules clearly state that you're required to report ALL income, including income from the black market, illegal sources, etc.


As was cited earlier, Al Capone was convicted of tax evasion. It doesn't matter if you're out there selling weed or working as a hooker, that income has to be reported and properly taxed.

Re:Should I RTFA? (4, Interesting)

UbuntuDupe (970646) | more than 6 years ago | (#19721613)

Okay, people keep saying this ... but when I report my "drug sales" net income (after amortizing my .45 and deducting bribes), won't they just turn that right around and charge you with a crime, implicitly requiring you to waive the fifth?

No, I'm not asking for personal legal advice, all you lawyers out there. I'm just asking if information disclosed this way has some special legal protection. It won't apply to me, since I don't sell drugs, so don't fret.

I might as well mention what the real problem is here, since people keep saying, "if you make a profit in terms of real dollars, that should be taxed, case closed". But if virtual money becomes liquid and convertible enough, government will *have to* tax it directly, even in-game. Why? Imagine this:

I want to defer taxes on dividends, like, you know, every investor with a taxable account wants to do. So let's say the stock exchange sets up "exchange dollars" (EDs), a special currency created and destroyed at will, simply by depositing a dollar or withdrawing it. The EDs are functionally identical to normal dollars, it's just that they only trade on the exchange. Whenever a corporation pays a dividend, it takes its normal dollars, buys EDs, and distributes the dividends. Whenever a corporation raises funds in an IPO, it takes the EDs and converts them to normal dollars. Now, should the investors still pay taxes on the ED dividends they got?

If you say no, then you don't think dividends should be taxed, because this scheme could be implemented today on the stock market -- but obviously, the government wouldn't fall for it.

If you say yes, then you agree that sufficiently-convertible virtual dollars should be taxed even if the profit exists only in-game. At some point, the virtual dollars become like the EDs or a foreign currency.

Re:Should I RTFA? (1)

IQgryn (1081397) | more than 6 years ago | (#19722025)

I believe that the money would be taxed as soon as the investors converted the ESDs back into regular dollars, just as the game money is being taxed when it is traded for real money.

Re:Should I RTFA? (1)

UbuntuDupe (970646) | more than 6 years ago | (#19722183)

So, you don't think dividends should be taxed, and all investors are overlooking a way to defer taxation of their dividends?

(Remember: simply delaying the point at which you are taxed on your total gain can increase your returns, even though you "still pay taxes" at some point.)

Re:Should I RTFA? (2, Insightful)

IQgryn (1081397) | more than 6 years ago | (#19722319)

As long as the money is taxed, along with any interest gained on it while it was in the alternate currency, I don't see a problem. The goal of taxes is (hopefully) not to prevent profit, but to ensure that a portion of all money earned goes towards the public good. If the money is effectively removed from the economy, there is no need to tax it until it is returned. It would be different if the virtual currency were being traded for real goods, since then the virtual currency isn't really virtual anymore. If the government wants to tax virtual currency directly, they should be prepared to accept virtual currency as payment, and I don't think they'll be willing to do that until they can do something useful with it.

Re:Should I RTFA? (1)

Lockejaw (955650) | more than 6 years ago | (#19722399)

Since EDs are backed by real USDs, a person could, without too much trouble, live without ever cashing out.

Re:Should I RTFA? (1)

IQgryn (1081397) | more than 6 years ago | (#19722529)

Not until stores start accepting EDs; you'd still have to exchange them for real money, and that income (the real money) would be taxed. If EDs do become accepted as money, then the government could tax them, and you could pay with them.

Re:Should I RTFA? (1)

Lockejaw (955650) | more than 6 years ago | (#19722277)

Okay, people keep saying this ... but when I report my "drug sales" net income (after amortizing my .45 and deducting bribes), won't they just turn that right around and charge you with a crime, implicitly requiring you to waive the fifth?
Report it as coming from something else. You might create a front organization for your drug trafficking operations that looks like a legitimate business and funnels money through all kinds of weird processes (labelled as seemingly legitimate expenses, charitable donations, etc.) to make it hard to trace it back to the drug sale. You could also report it as a gift/bonus if you're the nominal leader or a salary if you're not (of course, at some point there will be either records which don't match each other or records which don't match reality -- type A is probably more dangerous than type B). Money laundering can get rather complicated, but it makes your income look legit on paper, even if "everyone knows" it's not.

Re: the situation you describe
I'm not sure exactly why, but I'm rather disturbed by the idea of a private entity printing legal tender. In this case, it sounds like the EDs are backed by USDs, so I'm not sure if that really qualifies as printing money, but I imagine that if virtual currency were ruled non-taxable, the IRS would say that the EDs are simply electronic representations of real currency, much like existing banking systems, which have used bank-backed checks for ages and now also use electronic money transfers -- in both cases, no real greenbacks ever change hands. I guess the line is drawn when the virtual currency is backed by real money.

Re:Should I RTFA? (1)

Control Group (105494) | more than 6 years ago | (#19722517)

You need to define legal tender - if you mean, specifically, a medium of exchange that anyone who accepts cash is legally required to accept as cash*, then I agree with you (because the alternative is to make your legally-mandated medium of exchange completely valueless...and effectively to make counterfeiting not a crime). However, legal tender and taxation have little to do with each other. Regardless of whether or not your transactions are consummated with US dollars, you are legally obligated to pay taxes on the value of the transaction. This is not generally enforced and not generally obeyed, of course - but that's only because such a vast majority of transactions are performed with money as the medium of exchange.

But that doesn't mean it's legal for you to help someone move in return for a 12 pack without paying taxes on your earnings. Strictly speaking, you owe either income tax or sales tax on the transaction (this could be trivially gotten around by working in terms of gifts, rather than exchange of goods, of course, but the point remains).

My point, of course, is that it is the transaction that's being taxed, not the money. Stores that accept the liberty dollar [libertydollar.org] still pay taxes on the transaction. Employees who get paid by direct deposit still pay income tax, despite the fact that there's no "legal tender" involved, just an amount measured in USD units.

In that sense of private entities printing legal tender - meaning a fungible medium of exchange - they already do. As evidenced by the MMORPGs that are currently under discussion, as well as all the (pretty much DOA) efforts at some kind of electronic web-cash (I think beenz was one of them), and the aforementioned liberty dollar.

*Which is the definition of legal tender as used on US bills

Re:Should I RTFA? (1)

FreelanceWizard (889712) | more than 6 years ago | (#19722475)

Okay, people keep saying this ... but when I report my "drug sales" net income (after amortizing my .45 and deducting bribes), won't they just turn that right around and charge you with a crime, implicitly requiring you to waive the fifth?

They can't directly charge you with a crime AFAIK, though perhaps they might be able to if you did something really boneheaded, like write "illegal drug sales" in the "type of business" section of your tax return.

However, your tax returns can be used as evidence against you in a criminal case. If the police suspect you might be selling drugs, they can acquire your tax records. If those tax records show exorbitant income for your professed job, that could be used as evidence sufficient to acquire a search warrant, and then you're boned. Certain types of transactions have to be reported and made available to law enforcement agencies as well. The question for the criminal then becomes a risk analysis: is it safer to conceal the income from the IRS, or report it and hope it's sufficiently hidden or justifiable?

This page [irs.gov] describes some of the IRS' activities in narcotics enforcement.

Re:Should I RTFA? (1)

UbuntuDupe (970646) | more than 6 years ago | (#19726825)

Wow, I'm surprised this has withstood constitutional challenge. I mean, you're *required* to report income, which is in essence, a confession to a crime. I don't know how you can more clearly violate the fifth amendment right against self-incrimination.

Re:Should I RTFA? (0)

Anonymous Coward | more than 6 years ago | (#19731749)

You have the right to avoid incriminating yourself by not committing any crimes :)

BTW, I don't understand what you said about "ED"s. How can you increase your profits by deferring whilst still paying taxes when you cash out? I see that you can do it by investing your EDs in stocks that increase in value, but it seems to me that you'd also be risking losing money. From what you said it seemed there was a zero-risk option; what is it?

Re:Should I RTFA? (1)

dj.delorie (3368) | more than 6 years ago | (#19733675)

You can report THAT you got income without disclosing HOW you got the income. List it under "anonymous donation" or something.

EDs already exist. (1)

Estanislao Martnez (203477) | more than 6 years ago | (#19726807)

EDs already exist, and they're called dollars. This ED scheme is no different than if you had a dollar-denominated account at the exchange, and dividends simply credited your account with a USD amount, which you could cash out at will or have it credited to any debts you incurred with the exchange.

Or to put it another way: dollars, in the general case, exist as credits to accounts. You don't have to be given actual dollar bills for that to count as income; it is sufficient that some account that you own be credited for some amount. Giving you an ED nothing more than crediting one dollar to your account.

To make the example interesting, the EDs simply can't have the exact same value, liquidity and lack of risk as dollars, a condition that can't hold as long as each ED is backed by one dollar. Institute limited supply and a floating exchange rate, and then things start getting interesting. You get something like forex trading, in which you are indeed taxed when you convert your gains to USD.

...or even simpler... (1)

Estanislao Martnez (203477) | more than 6 years ago | (#19726821)

An ED is a security that gives its holder ownership interest on a dollar in some account that the ED issuer owns, without allowing the issuer to use or dispose of the dollar in any other way than paying the ED holder. If you own an ED, you indirectly own the dollar that backs that ED, period. If you come to own a dollar you didn't own before, that's called "income."

Re:Should I RTFA? (0)

Anonymous Coward | more than 6 years ago | (#19721515)

Ummm.. can you tax illegal money transfer?
Yes. I don't know if you're in the US or not but if so then read your tax forms. Bizarre as it sounds there is a specific section for illegal gains.

Re:Should I RTFA? (1)

Fongboy (712864) | more than 6 years ago | (#19721653)

According to the IRS, yes they do tax illegal activity. They just want your money... who cares where it came from! =)

You can see it here:
http://www.irs.gov/pub/irs-pdf/p525.pdf [irs.gov]

Go down to page 28 under the section titled "Other Income". There's all sorts of funny stuff there like bribes, kickbacks, and illegal income (where they specifically mention selling illegal drugs). They figure that nobody actually reads the instructions that come with the 1040 forms. I guess I'm just obsessive-compulsive about filling out forms correctly. =)

Re:Should I RTFA? (0)

Anonymous Coward | more than 6 years ago | (#19722563)

Not at all. California passed propositions related to medical marijuana, though possession and use is still 100% illegal under federal statutes.

What the quoted guy probably said (minus translation difficulty) is that the Korean tax board is not trying to legislate from their desks, but they are providing a tax solution that will be used as long as RMT is legal (which in any free country means "not illegal").

Wow if South Korea is gonna do that.... (0)

Anonymous Coward | more than 6 years ago | (#19721453)

I'd hate to see what North Korea has in mind!

Re:Wow if South Korea is gonna do that.... (3, Funny)

Demon-Xanth (100910) | more than 6 years ago | (#19721657)

North Korea has it's own virtual economy. Actually, it's the only economy they have.

*uses super power* *waves and ignores*

Suppose (1)

Frozen Void (831218) | more than 6 years ago | (#19727621)

They outsource/move their farming operations outside of SKorea.How they will be taxed?
The people making money from this are usually well organized.

Good news for South Korea (1)

anduz (1027854) | more than 6 years ago | (#19728395)

I like that they are not going to make RMT illegal, at least in South Korea - because with all the negative focus on RMT recently I frankly had a scary feeling that it'd end up being just a nother limitation on a long list of unnecessary subduement. Let's hope our own politcians are just as wise.

Adding Accountancy Skill to My Mage (2, Funny)

Hoi Polloi (522990) | more than 6 years ago | (#19730333)

HR&R Block will be starting up a server in WoW every March. All characters will be required to finish the "Form 1040" quest.
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