MindArk CEO: Swedish Tax Agency Making Rash Decisions

"They have chosen not to make as rash statements as the Skatteverket," MindArk CEO Jan Welter told Realtid [via translation] the U.S. Congress' cautious approach to taxation in virtual worlds. Earlier this month, Sweden's tax agency, Skatteverket, moved in the opposite direction, issuing a ruling that declared in-game transactions taxable, even before any attempt to cash out a virtual currency. In spite of the numerous safeguards  MindArk puts into place to keep Entropia Universe from turning into a money launderer's dream, Welter thinks enforcement is close to impossible.

"Skatteverket states that gamers should send invoices to each other," Welter said. "It's unreasonable stuff they're talking about. The users don't know who they're interacting with."

The full translated article is available on an Entropia forum. It looks like it was translated by a user, but MindArk evangelist John Bates passed it on to me, so it should be fairly representative. He says, though, that it doesn't seem like Sweden hasn't committed to a set course of action.

"Hopefully they'll listen to the feedback from this announcement," said Bates. "I am happy to pay taxes, as I really love the US and I am clear that I get a lot of value from living here. I believe Mindark feels the same way about Sweden. I think the taxman has to be careful not to kill the golden goose, though. I think it's a good idea to let the gosling grow up and figure out how to get as many golden eggs as possible, instead of one unsatisfying meal of baby goose."

Bates acknowledges that if users are profiting from virtual worlds, they should probably pay taxes, just as with any other effort. Only a few Entropia users make enough to fall under the new ruling, though, which only exemplifies the many questions of how, when, and where to pay taxes on transactions in virtual worlds--and neither Skatteverket or Congress seem to have the answers yet.

Comments

[nic mitham]

Swedish Tax Agency Making Cash Decisions