- The Ministry of Finance in Taiwan has issued a directive regarding the taxation of online game currency transactions provided by businesses
- Businesses that facilitate the trading of game currency between individual players can levy business tax on the difference between the payment received and the payment made
- The transactions must involve natural persons and the business must verify the real identities of both the buyer and seller
- The business model operates on a buy-first sell-later basis to ensure contract fulfillment and prevent fraud
- For example, a business may buy game currency from one player at a certain rate and sell it to another player at a different rate, managing both the money and the game currency transactions
- If the initial seller is an individual, the business cannot claim input tax credits, leading to a higher tax burden
- If the initial seller is a business, the intermediary business can claim input tax credits, balancing the tax burden
- Following new regulations, the business can issue a two-part taxable invoice for the tax on the profit margin and keep it for records
- The Ministry of Finance aims to rationalize the tax burden for businesses involved in these types of transactions due to their unique industry characteristics and the C2B2C transaction model
- Individuals providing game currency trading services for profit through the internet must register for tax if their monthly sales exceed the threshold set for business tax initiation
Source: mof.gov.tw
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
