International Law

Virtual Currency Tax: Who Will Declare?

By Stan

Saw this a few days ago and just now figured out what was bothering me:

Individuals will be taxed 3% on income earned from virtual currency trades, as specified by property transfer regulations, reports Beijing Evening News quoting a Beijing Local Taxation Bureau employee. For those who provide an income certificate for the traded currency, income will be taxed 20% after deducting the currency’s original value and some reasonable expenditures.

The State Administration of Taxation said that income from virtual currency trades conducted between individuals should be taxed according to personal income tax law in late October.

First, the term "virtual currency trades" is not so clear, right? I probably should track down the Chinese term on this to see what this is really all about, but in the face of breathtaking laziness on my part, it is not likely to happen.

Second, what’s the likelihood that these kinds of transactions will be reported and income will be declared? Yeah, that’s what I thought.

Seems like kind of an aspirational tax rule to me. Hard to see how this will be enforced.

Full post as published by China Hearsay on November 12, 2008 (boomark / email).