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South Korea Now Officially Taxing Virtual Worlds
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who sell over $6,500 worth of virtual goods or currency in a given year will have an automatic Value Added Tax (VAT) withdrawn by the service they contract through.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."
They're taxing real money that people make for selling virtual goods.
"It is a miracle that curiosity survives formal education." -Albert Einstein
http://en.wikipedia.org/wiki/Income_tax_in_the_Uni ted_States
Al Capone wasn't arrested for bootlegging, but for not paying taxes.
Some people encrypt by using rot-13 twice. I prefer the more secure method of using rot-1 a total of twenty six times.
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.