Yeah seems like the writer of the PC Gamer article doesn’t understand what VAT is.
To laymen like you and I, this situation probably seems pretty open and shut. If you make money on something, you pay taxes on it.
Yeah VAT is not a tax on money made. VAT is a tax that is applied to a transaction for goods and service between a business and a consumer. VAT is a tax that the consumer pays. The business only collects it and has the obligation to pay it to the tax services. So even if a business makes zero profit they still need to pay the VAT they collected.
The question here was if RuneScape gold is a product or if it is legal tender. If it was legal tender then you don’t pay VAT on it, similar to when if you trade one currency to another VAT is not applied.
The real genius behind VAT is that it isn’t just applied to transactions between business and consumer, but to all transactions. The rule is normally very simple, it’s applied to all transactions, with few exceptions. The rate can vary, but those rules are also usually very simple. The trick is: When a business has a transaction with another business, VAT is still applied, but the selling party has to levy the tax and forward it to the government and the purchasing party can ask the government to give back the tax they paid on the transaction.
This may seem a bit convoluted, where the tax goes through the government only to end up back in the business. But this ensures the tax is applied always. Normally a profitable company would sell their products for more than the components they purchased. The difference between these two is the value added. And by getting back less from the purchases as what they have to pay for sales, the tax is only applied to the value added. And for consumers it functions as a sales tax, being applied to all transactions and no way around it.
This system is way harder to mess with than any other form of sales tax. The rules are simple with few exceptions and thus very easy to reinforce. It’s also a more fair system, where each party in the chain pays a part instead of the consumer paying for all of it.
In the end the consumer pays most, but as the taxes are supposed to be used to make their lives better, it seems like a fair deal? Now if you have a government that’s more about filling their own pockets than actually doing what they need to do to improve the lives of the people living there, well then you are going to have a bad day. But that doesn’t happen in civilized countries right?
Speaks greatly for the quality of pcgamer. Guess the schools in the USA aren’t the very best.
to be fair, I don’t think any US state has VAT.
AFAIK they do? Different even in every state.
Many US states have sales tax, but I don’t think it counts as VAT.
Ah right, just a sales-tax. I should’ve shut up 😁
Earning 400,000€ in two years makes you part of the 1% though?? Where else would this guy be? Upper middle class?
Okay that’s not nothing but 200 000€ / year is hardly top 1% in EU, I think.
This is what slop gave me:
Based on available data on income distribution in Europe, a rough estimate for a gross annual individual salary to be in the top 1% across the EU would likely fall above €200,000.
When I asked how much you’d need to make in a year to be in EU top 1%. Didn’t even mention 200 000.
So yeah upper class but not necessarily top 1%. In Lithuania they’re probably top1% but not on the EU level.
Sorry for being pedantic, you were close enough tho
According to the German (I have not found an EU equivalent) office for statistics, you are part of the top 1% of full-time workers if you earn >213,286€ per year:
https://www.destatis.de/DE/Presse/Pressemitteilungen/2025/04/PD25_134_621.html
Sure, this doesn’t include billionaires who don’t work but there just aren’t enough of them to matter. It’s not like there are hundreds of thousands billionaires in Germany.
This is actually really interesting!
This taxable individual, Kokott explains, was found to have bought and resold through “various forums, groups, and platforms such as Facebook, Discord, and Skype” enough RuneScape gold to earn €415,484—approximately $488,000 USD—between 2021 and 2023.
They then were ordered to backpay VAT because they made above 45k. Defendant says trading virtual currencies is like trading crypto, and VAT exempt. Government says its like selling a voucher instead.
Its corner cases like this one that make taxes complicated for regular people.
I also find it hilarious that tax lawyers and accountants will have to read that court decision.
Shit, sounds like I should set up some runescape bots to sell gold, even if I only get like 10k USD a year, that’s doubling my income
Food safety organs need to inspect all those Stardew Valley farms.
Can I get taxed if I buy a gf for 25k?
Yeah you pay VAT because you are buying a service. But your “gf” has to collect it and pay it to the tax agency.
Depending on the country, and depending on the gift, yes. Though it’s mostly not enforced.
I dunno about the tax laws here. Seems anything purchased in game with fake game money that stays in game shouldn’t be subject to a sales tax. Buying game currency with real currency? Sure. Buying real things by selling in-game accounts or items for real money? Fine.
Damn, good use of their time! Not going after trillionaries, no.
advocate general at the Court of Justice of the European Union Juliane Kokott
Anyone from Czech/Slovak Republic here?
I know it’s infantile, but.
