Virtual Goods Tax for new Startup Website

[kaosjon]

Hi, i am new to the forum and have found some great stuff so far. I am currently developing my website, however i have a couple of questions that need answering. One of the big ones is, Virtual Goods Tax.
My website will allow users to buy 'points' on the website and later exchange the points back into real money, at what point will i have to pay virtual goods tax for these transactions if at all. The information on this subject seems to be pretty hazey as i can't find any concrete news of virtual goods tax actually being enforced.

Thanks for any and all help

 

[csaba]

Hi, i am new to the forum and have found some great stuff so far. I am currently developing my website, however i have a couple of questions that need answering. One of the big ones is, Virtual Goods Tax.
My website will allow users to buy 'points' on the website and later exchange the points back into real money, at what point will i have to pay virtual goods tax for these transactions if at all. The information on this subject seems to be pretty hazey as i can't find any concrete news of virtual goods tax actually being enforced.
Thanks for any and all help

Disclaimer: not an accountant, but been doing my own books for 4 years, with a professional accountant's oversight.

To my knowledge, there is no such thing as Virtual Goods Tax. Money coming in, in any shape or form is "revenues". Money paid out -for points, for dragon kills, for buying stuff- is "expenses".
Revenues - expenses = profit.
You pay after whatever *profits* you make, using whichever bracket you tend to fall into (typically, Corporate rates, or self-employed rates).
Simple as that.