Australia says virtual income taxable - report
By Adam Reuters
SECOND LIFE, Nov 1 (Reuters) - The Australian government has determined that income earned in virtual economies like Second Life and World of Warcraft should be taxed, as authorities in the United States and Britain study the issue, according to a report in the Sydney Morning Herald.
“The real world value of a transaction may form part of your taxable income, even if it is in Linden dollars,” a spokeswoman for the Australian Tax Office told the paper. “If you are getting a monetary benefit then it’s not treated any differently - normal rules apply.”
In Britain and the United States, income earned in a virtual currency such as Linden dollars is only taxable after it is converted into a real-life currency. A U.S. Congressional committee is investigating whether new laws need to be created to deal with the rapid growth of worlds like Second Life, although the committee’s chairman has said he is opposed to any “premature attempt to impose a tax on virtual economies.”
Britain’s tax authority are taking a “wait and see” stance on the issue.
