News, research and discussion on virtual goods, currencies and economies globally.

China Taxes Real Profits from Virtual World Transactions

Author(s): 
Zhang, Bill; Tang, David; Tiano, Joseph R. Jr.; Gatto, James G.; Duranske, Benjamin T.; Esplin, D. Benjamin
Year: 
2008
Publication information: 
Advisory, Pillsbury Winthrop Shaw Pittman LLP
URL: 
http://www.pillsburylaw.com/bv/bvisapi.dll/portal/ep/paPubDetail.do/pub/20081117123759562/channelId/-8595/tabId/5/pageTypeId/9208

Abstract from the paper

China has declared that it will tax profits on transactions involving virtual currency. In response to an inquiry from the Beijing Tax Bureau, China’s State Administration of Taxation issued a “Written Reply on Imposing Individual Income Tax on the Revenue Derived from Online Trade of Virtual Currency by Individuals” on September 28, 2008 (the “Written Reply”). The Written Reply imposes an individual income tax of 20% on income derived from online trade of virtual currency.

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