Australia To Tax Money From Second Life, But Can Money Spent On Your Avatar Be A Write-Off?
from the H&R-Block-Next-To-Set-Up-In-Second-Life dept
There continues to be a lot of discussion about the real world implications of activity inside virtual worlds. One of the issues is how to deal with taxation, and it appears that Australia has taken the lead, announcing that they plan to tax money made in virtual worlds, specifically citing Second Life Linden Dollars. A spokesperson for the country’s tax office said that if you’re getting monetary benefit from the site, then it should be taxed like any other income. What’s not clear is when the money is taxed. Do they tax you when you’ve cashed in your Linden Dollars for Australian Dollars? If they did this, the policy would make sense, as it’s basically like a capital gains tax, which is levied after someone sells their stock. Or, do they tax the player based on their Linden Dollars even if they don’t cash out. This would be a ridiculous policy as it would basically be taxing people for playing a game. Assuming it’s the former, the taxation occurs after withdrawing the money, it could be a real boon for Second Life, as it would discourage people from taking money out of the in-game economy.