China to tax virtual property

The Wall Street Journal reports that The State Administration of Taxation will impose a 20 per cent income tax on virtual profit. The move is being targeted primarily at gold farmers – those who buy virtual currency with the goal of selling it on at a higher price – but the implications could be far more wide reaching.

The move comes as reports suggest that China’s virtual currency market is growing 15-20 per cent annually and is currently worth several billion Yuan. Some have even voiced concern that if the practice continues to grow it could have an effect on the nation’s inflation.

However, critics have stated that it is unfair for the state to target individuals and not internet companies.