UK to wait and see on virtual world taxes
By Adam Reuters
SECOND LIFE, Oct 31 (Reuters) - British tax authorities are keeping a close eye on virtual economies but are waiting for the result of a U.S. Congressional investigation before taking action, a spokesman for the UK Treasury told Reuters this week.
“Our reaction to this at the moment is it’s something that’s very interesting and we are considering it,” the spokesman said in a telephone interview. “Where we stand at the moment is it’s not something that’s having a significant revenue effect. We don’t see a possibility of people being able to exist solely on money within Second Life. They’d have to withdraw the money and when that happens they’d be expected to pay a normal tax bill.”
Congress’ Joint Economic Committee is expected to turn in an initial report by the end of the year. Britain’s Treasury will be watching closely.
“Obviously we’ll be considering what comes out of the U.S. review on this,” the spokesman said. “Our general current consideration is that income from all online games should be declared to the revenue (service), in exactly the same way for Second Life as they would be for eBay, say.”
While it is not known how many Second Life residents are based in Britain, the country has the highest number of users per capita, according to Linden Lab’s sole UK-based employee, Jim Purbrick, aka Babbage Linden.
