South Korea to Tax Virtual World Sales

According to a Slashdot article referencing Next Generation via Kotaku via some guy’s blogged translation of an ETNews article in Korea, South Korea is going  to start taxing sales of virtual world items. It’s called the Value Added Tax (VAT) and those who sell between 6 and 12 million won (US$6,500 – $13,000) in virtual goods every half year will have VAT applied automatically by the transaction’s middle-man. Any more than 12 million won every half year in business and the seller will need a business license and will pay the tax themself.

But, since many online games claim that all in-game items traded for real money belong to developers and not gamers, it’s unclear who will be required to pay the tax. The gaming industry is yet to speak up on the issue.

The Korea National Tax Service (NTS) claims that they will be able to “monitor all transactions as [real-money trading] 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 legal or not,’ he added.”