For the Record: Russians Possibly To Pay VAT for Gold – Price Increase Incoming?
Hello everyone, Russian site habrahabr.ru posted an interesting information. Wargaming’s competitor on Russian market, company Mail.Ru (the creator of an atrocious browser-based WoT clone called Ground War: Tanks) was involved in a Arbitration Court of Moscow decision number А40-91072/14-90-176 (“Mail.Ru Games versus IFNS No.14″). The verdict was announced on 24.11.2014. IFNS stands for Federal Tax Service Inspection – you know, Russian IRS. In early 2014, IFNS made a thorough audit of the abovementioned company, as a result of which it was found out that in the second quarter of 2013, Mail.Ru made cca 1,6 billion rubles (cca 26 million Euro) from “implementing additional game functionals”, in other words, for selling premium accounts, tanks and such. IFNS decided to tax this revenue with VAT (18 percent) and ordered Mail.Ru to pay cca 292 million rubles as VAT backpayment (and possibly 58 million more as a fine for tax evasion). Mail.Ru was not trying to evade taxes, because according to Russian law these payments are exempted from VAT, but IFNS did it anyway. In other words, IFNS considers the sale of virtual items (and this already concerns WoT, I am sure you see how) subjected to VAT. Mail.Ru of course did not want to pay anything, so they put it up for a court to decide. And, surprisingly enough, the court sided with IFNS. I do not know whether Mail.Ru appealed (or whether that’s even possible), but the point is, it’s completely possible that other game developers (including Wargaming) will be soon subjected to “random inspections” and with a court decision in their hands, IFNS will demand more taxes (Russia needs money after all, I don’t have to tell you why). My first reaction to this was “well, that explains a lot”. Conclusion It’s clear that in the end, it will be the players, who pay the bill. But the real question is – WHICH players? Russian ones already saw the prices on their server soar with the plummet of the ruble (since the prices are tied to USD), so I think that as a “global” company, Wargaming might transfer those costs to regions with richer players. In other words, us. So, keep an eye out for price increases.