Australian Tax Office Will Tax Income from Virtual Transactions

A spokesperson for he Australian Tax Office, in what is probably a world first, has said that if a virtual transaction has real world implications - if it can be attributed a monetary value - it attracts the attention of the Tax Office. In her words:

“The real world value of a transaction may form part of your taxable income, even if it is in Linden dollars,”

Australia seems to be heading in a different direction on this issue as the U.S. is based on Representative Jim Saxton has recently said.

Dale’s Comment: Frankly this makes complete sense to me. I see no reason to make a distinction between real-world revenue generated from virtual activities and any other income.

Sources: TheAge.com | Kotaku | nzherald.co.nz | TaxNews.com

• PC World: Virtual Gold Could Draw Real Taxes (January 29, 2007)
• GameSpot Article: IRS Taxation of Game Assets Inevitable (December 4, 2006)
• Anshe Chung Becomes First Second Life Millionaire? (December 2, 2006)
• Representative Jim Saxton Believes Taxing Virtual Economies Would be a Mistake (October 17, 2006)
• Is an Eve Online Ponzi Scam an Actionable Fraud or Taxable by IRS? (September 1, 2006)
• Dragon Slayers or Tax Evaders? (January 7, 2006)

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