Sweden to Tax Fake Stuff - The UpStream

Sweden to Tax Fake Stuff

posted Friday Jul 24, 2009 by Scott Ertz

Sweden to Tax Fake Stuff

This is a story that will hurt Adam greatly. Sweden wants to tax your MMO avatar sales. That's right, if you sell a game character for, say, WoW, you will be required to pay an income tax on that money. Their reasoning is,

The agency has investigated the trading in avatars during a 14 month period and found the advertised sum of avatars for sale by Swedes to be 662 million SEK. But no one has ever declared any income for trading in avatars to the Tax Agency.

That isn't the end of the story, however. It turns out they might want a cut of your in-game sales, as well.

Transactions between participants in a virtual world, where the deal is about the sale of a "product" or a "service" against reimbursement in an internal currency, should be considered, according to the Swedish Tax Agency's ruling, {actual} sales of electronic services, if the internal currency can be exchanged to a valid legal means of payment.

Isn't it great to live in America? Wait, you trade with people in Sweden?

U.S. citizens are subject to Swedish taxes in virtual worlds, as long as one of the participants is Swedish. The implication is that if similar tax rules are adopted around the globe, U.S. citizens could end up owing taxes to Sweden, Japan, South Korea, and other nations (depending on which and how many worlds they are part of) - all because they played some games.

Damn! That sucks! If you trade with someone in Sweden, you are required to pay the tax anyway. Eep.

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