Korea: Online game currency transactions to pay 10% VAT

Recently, South Korea issued a new ruling, that is, the sale of game currency online games also need to pay 10% VAT.　　As a result, middlemen who buy and sell online game coins in South Korea face huge taxes.　　Recently, the Seoul Administrative court to the text, such as the "game currency can not be regarded as property, so do not pay tax" related litigation issued the plaintiff lost judgment. In the course of 2003 to 2005, the purchase of online game coins for sale to other players paid only 2% VAT.　　According to the South Korean value-added tax law, the cost of goods or services less than 48 million won (the equivalent of about RMB 260,000 yuan) of self-employed operators, will be designated as simple taxpayers, only pay a 2% value-added tax.　　However, South Korea's Jiangdong tax authorities believe that the sum of the game currency for sale is about 4.62 billion won (the equivalent of about RMB 25.65 million yuan) is not a simple taxpayer category, should pay 10% value-added tax according to the ordinary tax standard.　　Therefore, a text such as "game currency does not belong to the real property, but only the computer code, not part of the value added tax law provisions of the property" as a result of the lawsuit, but ended in a losing case. In response, the magistrate explained that the game currency was a valuable trading product because it earned profits from scalping.　　The game currency used in the online game also belongs to property, should be in accordance with the VAT law to pay 10% of the tax. On the other hand, the network information sales enterprises which started in South Korea in January 2007 should pay VAT in accordance with the VAT law, and the enterprises with more than 10 transactions reached 12 million won in 6 months. And sales reached 100 million won (equivalent to Rmb 555,000 yuan) above, to pay 10% value-added tax. (Wen/17173 Xiao Han)