If Runescape gold is legal tender, do I have to pay taxes on my earnings from my Zulrah grind?
SkunkWorkz@lemmy.world 11 hours ago
Yeah seems like the writer of the PC Gamer article doesn’t understand what VAT is.
To laymen like you and I, this situation probably seems pretty open and shut. If you make money on something, you pay taxes on it.
Yeah VAT is not a tax on money made. VAT is a tax that is applied to a transaction for goods and service between a business and a consumer. VAT is a tax that the consumer pays. The business only collects it and has the obligation to pay it to the tax services.
The question here was if RuneScape gold is a product or if it is legal tender. If it was legal tender then you don’t pay VAT on it, similar to when if you trade one currency to another VAT is not applied.
MBech@feddit.dk 10 hours ago
commiunism@lemmy.dbzer0.com 3 hours ago
Yeah, that’s why they added the GE tax
SkunkWorkz@lemmy.world 10 hours ago
Probably income tax or a gambling tax like what you’d pay if you win money one a game show. But there is a threshold, so tax free for small earnings.
brsrklf@jlai.lu 10 hours ago
The question here was if RuneScape gold is a product or if it is legal tender. If it was legal tender then you don’t pay VAT on it, similar to when if you trade one currency to another VAT is not applied.
Even if they went that way (good luck with that), doesn’t that mean farming gold regularly and for profit should still be registered as a professional activity? Or at least the result of it declared as revenue?
I don’t think they want that.
SkunkWorkz@lemmy.world 10 hours ago
Of course he still needs to pay income tax. But that’s something else from VAT.
Dyskolos@lemmy.zip 10 hours ago
Speaks greatly for the quality of pcgamer. Guess the schools in the USA aren’t the very best.
mushroomman_toad@lemmy.dbzer0.com 10 hours ago
to be fair, I don’t think any US state has VAT.
Dyskolos@lemmy.zip 10 hours ago
AFAIK they do? Different even in every state.
Thorry@feddit.org 10 hours ago
The real genius behind VAT is that it isn’t just applied to transactions between business and consumer, but to all transactions. The rule is normally very simple, it’s applied to all transactions, with few exceptions. The rate can vary, but those rules are also usually very simple. The trick is: When a business has a transaction with another business, VAT is still applied, but the selling party has to levy the tax and forward it to the government and the purchasing party can ask the government to give back the tax they paid on the transaction.
This may seem a bit convoluted, where the tax goes through the government only to end up back in the business. But this ensures the tax is applied always. Normally a profitable company would sell their products for more than the components they purchased. The difference between these two is the value added. And by getting back less from the purchases as what they have to pay for sales, the tax is only applied to the value added. And for consumers it functions as a sales tax, being applied to all transactions and no way around it.
This system is way harder to mess with than any other form of sales tax. The rules are simple with few exceptions and thus very easy to reinforce. It’s also a more fair system, where each party in the chain pays a part instead of the consumer paying for all of it.
In the end the consumer pays most, but as the taxes are supposed to be used to make their lives better, it seems like a fair deal? Now if you have a government that’s more about filling their own pockets than actually doing what they need to do to improve the lives of the people living there, well then you are going to have a bad day. But that doesn’t happen in civilized countries right?
Tetsuo@jlai.lu 9 hours ago
VAT fraud is harder but my god when some people achieved it they pretty much unlocked a money spawn glitch IRL…
en.wikipedia.org/wiki/Missing_trader_fraud?wprov=…
Thorry@feddit.org 3 hours ago
Yeah EU VAT opened up a whole can of issues. It’s super complicated and annoying, with all sorts of weird exceptions. The exact opposite of what VAT was supposed to be. EU countries should have just gotten their shit together instead of this patch work.
I’ve actually seen that fraud in action. People used to ship around huge amounts of phones and CPUs, because they were high value, but took up very little room. A truck full of pallets of tray CPUs could be worth a huge amount.
I think now most of the holes are patched. But for a while there were special rules surrounding phones and CPUs just because they were often used in the fraud scheme.