14 DAY TRIAL // The State Administration of Taxation in China is announcing that it plans to impose a 20% personal income tax on the profit made from virtual currency. Most people affected by the new tax will be those who buy or hoard virtual currency in order to later sell it to make a profit. This group of people is usually labeled “gold farmers” and they are present in pretty much all the MMOs now playable. It seems that services which offer virtual currency that can be used for virtual messaging and web portals could also be affected.
Most of the people polled by Chinese web sites before the tax was announced said that it was a bad idea, mainly because it’s very difficult to evaluate how much virtual currency it is actually worth. There's also the issue of no paper trail when gold farmers move their money to another account and that most of the transactions are done under a certain level of secrecy.
It's not clear how much money changes hands each year as a result of gold farming and gold selling, but it seems that the trade is now worth billions of yuans and some people are looking to launder money by buying and selling virtual gold. Some of China's authorities are worried that inflation could rise and last year they enacted measures which prevent players from changing virtual currency into yuans. It's still unclear how the tax on virtual currency will be enforced by the Chinese authorities.
Earlier this year, Warhammer Online: Age of Reckoning took a hardline on gold farmers, as far as Western MMOs are concerned. In other games, farmers are tolerated as long as they do not infringe upon copyright or privacy rights.