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Recommended Reads: Mainland China charges virtual currencies with tax

"In an online poll by the Sina.com, over 70% out of about 3,000 people who voted were against the new taxation decision. The biggest doubt is how the actual sum of property will be evaluated." (Juliet Ye, the Wall Street Journal)

The Wall Street Journal reports on a recent move of China’s State Administration of Taxation to charge virtual money with a personal income tax: “China will impose a personal income tax of 20% on profit from virtual money. The announcement, which was distributed to local tax bureaus, specifically takes aim at those who buy virtual currency from gamers and surfers and sell it to others at a mark-up. Taxation officials are granted the right to determine the original price of online virtual currency if the individual fails to provide proof of an original price, it says.“

The new tax caused a storm of Chinese protests (allegedly over 6,000 comments were left on Netease.com one day after the news had surfaced); it seems to be aimed at combating the growing problem of money-laundring in virtual worlds in Mainland, which threatens to cause an inflation of the Renminbi. Last week, Virtual Worlds News reported that “Korean police arrested a group responsible for laundering money generated by Chinese gold farming from Korea back to the mainland. Over 18 months, the group wired $38 million from Korea to a Hong Kong paper company as payments for purchases. In return, the group took a commission of 3-5% for purchasing the virtual currency in China, reportedly produced by traditional farming as well as viruses, and then cashing out in the Korean market.“

The move does not come as a real surprise, since other countries like Korea and Sweden are already rolling out their own tax plans for virtual currencies, as Virtual Worlds News has it. Still, it remains being an exceptional decision, with quite a few obvious problems—one might be sceptical if both the tax will be introduced successfully in the end and if it will really turn out as a successful measure against virtual crime.

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