Shanghai Taxation: Individuals who buy and sell virtual currencies online need to pay personal income tax

The Shanghai Municipal Taxation Bureau of the State Administration of Taxation released an article on its official account titled "Common Misunderstandings about Individual Income Tax on Operating Income and Categorized Income". It pointed out that individuals who buy and sell virtual currency through the internet need to pay personal income tax. The "Reply on the Issue of Levying Individual Income Tax on Personal Income Obtained by Individuals through Buying and Selling Virtual Currency on the Internet" (Guoshuihan [2008] No. 818) stipulates that individuals who purchase virtual currency from players on the internet, add a markup, and then sell it to others to obtain income, belong to personal income tax taxable income and should be calculated and paid according to the "Income from Property Transfer" project. It is reported that the "Reply" also mentioned that the original value of the property sold by individuals for virtual currency is the price and relevant taxes paid for the purchase of virtual currency on the internet. For individuals who cannot provide vouchers for the original value of the property, the competent tax authority shall determine its original value.