Gold farming, real world taxation and regulations
Gold farming has been getting increasingly popular and it has reached the stage where several countries have had to make special provisions for it; either declaring it illegal or legally accept it as a form of employment. No matter what your personal opinions are on gold farming, it is a phenomenon that is here to stay.
BBC News reported that at least 100,000 full time gold farmers resides in China alone, with the global number of dedicated gold farmers being somewhere twice this number. The detailed report can be found here.
Korea, where it is a legal business to gold farm on MMORPGs, thousands of players spend up to 16 hours a day building up their online characters and collecting goods which they can later sell and profit from RMT.
RMT micro transactions within the game have also been introduced by game developers to take advantage of the gold farming practices, where numerous players now tries to get to a level playing field by purchasing in-game items to compete against veteran players who have been playing the game for several years.
What is gold farming?
Gold farming is a term used to describe an online gaming business that employs workers to play a massively multiplayer online game to acquire in-game currency and items in exchange for real money.
Popular online gaming websites and services attracts millions of players each year due and anyone who is new to a game often tries to skip the initial stages of the game by acquiring game currency and rare objects fast; that way, new players are able to move on to the fun stages of the game a lot faster.
MMORPGs are preferred for this reason and you can find hundreds of gold farmers on any popular MMORPGs on any given day.
Countries with laws about gold farming
The popularity of gold farming can be gauge from the fact that several countries had to amend their tax laws in order to make the income that gold farmers gained online taxable.
- Australia: Gold farming is very popular in Australia and leading gold farmers have earned hundreds of thousands of dollars, just from playing online games and earning real money by selling their characters and virtual possessions. Australia has made gold farming taxable all the way back in 2006 and selling virtual goods are covered under regular income tax laws.
- China: Where the world’s largest number of gold farmers exist had to make the process of buying real world objects using virtual currency an illegal act. This was after players started trading their possessions to get more virtual money. The reverse, however, is still legal and players can buy virtual goods using real currency.
- South Korea: The phenomenon of gold farming is said to have spread from South Korea and the country recognizes it as a legal and taxable activity. Use of bots and automated software for gold farming is illegal in the country.
- Japan: Although the country has no specific laws regarding gold farming, in 2006 the government requested game developers to work on curbing gold farming.
- USA: An investigation committee was set up to investigate the money players make from gold farming, but the nation has not created any special laws regarding this as of yet.
- EU: Import of virtual goods is legal in the whole of the European Union, but no special tax laws exist regarding this.