Virtual money is taxable in S.Korea

Supreme Court of Korea stated if someone makes a profit by repeating the trade of virtual money, he/she needs to pay tax because it could be considered as business.

Mr.Yun has made a profit by trading the virtual money called ‘Aden’ in ‘Lineage‘ through a trading site. He earned US$350,000 during the first 6 months in 2004 only.

The taxation office imposed him to pay about US$104,000 as income tax and VAT. He did not have a business license, but the office registered his address as a place of business and e-commerce as business field by exercising their authority to impose him a tax.

Mr.Yun filed a suit against the head of taxation office and insisted ‘Virtual money is not the subject to impose a tax because it does not have the value as one’s property. Virtual money is just an electrical code within an electric game itself.’

However, he lost a case at the courts of the first and second instance and Supreme Court. Finally, he needs to pay the tax. Supreme Court looks Virtual money as goods and the act of ‘repeating trade’ as a business. By VAT law in Korea, he/she needs to have a business license and pay a tax if someone makes an income more than US10,555 (16 million Won) by trading something more than 10 times within 6 months

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