L to CAD and the legal responsablity

[Sora Skyward]

I am a resident of Canada. I want to take L earned from marketplace sails and take it out of Second life and into CAD, as a side income.

I'm confused on the legal side of things. in my mind its no different then say. selling a used bicycle on kijji or something like that. but correct me if im wrong. do i need to register my business with the Canadian government? or pay taxes? ect?

[Rolig Loon]

Any advice that you get here will be unofficial amateur advice, so don't accept it as "true" without verifying it through your own tax accountant and lawyer.  When you receive money in most parts of the world, local and federal government agencies usually want to know where you got it, and will have a cloud of rules about how much of it they expect to get from you.  The rules are so complex and so peculiar to each location that there's no way to be sure that the answers you get about one place will be relevant to your own home.

[LittleMe Jewell]

32 minutes ago, Sora Skyward said:

I am a resident of Canada. I want to take L earned from marketplace sails and take it out of Second life and into CAD, as a side income.

I'm confused on the legal side of things. in my mind its no different then say. selling a used bicycle on kijji or something like that. but correct me if im wrong. do i need to register my business with the Canadian government? or pay taxes? ect?

Just to get the money out of SL, you'll have to agree to the Tilia TOS and provide LL with some info to confirm your identity and address.  After you finally get the money, it is your responsibility to handle the governmental / taxation stuff based on your country's laws.  As far as I know, LL only sends financial information to the US IRS, but not to any other countries -- though I am not completely sure of that.

 

[Sora Skyward]

so. its not considered a company. to run a sell stuff on SL. just a company within SL. and the money you earn is just money earned. its not a official company like "bobs construction" for example?

[LittleMe Jewell]

16 minutes ago, Sora Skyward said:

so. its not considered a company. to run a sell stuff on SL. just a company within SL. and the money you earn is just money earned. its not a official company like "bobs construction" for example?

Not unless you make it an official company -- at least that is how it is in the US.  In the US, if it is registered as a company, then the earnings are claimed by the business for taxes, otherwise the earnings are claimed by the individual.

I don't know how online earnings are viewed in Canada. 

[Rolig Loon]

1 hour ago, LittleMe Jewell said:

1 hour ago, Sora Skyward said:

so. its not considered a company. to run a sell stuff on SL. just a company within SL. and the money you earn is just money earned. its not a official company like "bobs construction" for example?

Not unless you make it an official company -- at least that is how it is in the US.  In the US, if it is registered as a company, then the earnings are claimed by the business for taxes, otherwise the earnings are claimed by the individual.

Right.  You don't have a separate account for your business(es) within SL.  All of the L$ that you may receive for selling stuff or providing services and all of the L$ that you spend in world to support them are funneled through your individual account.  If you have a store in Marketplace that is successful enough to earn you a whale of a lot of L$ in a year, and if you sell those L$ and transfer the cash to your PayPal account, Linden Lab/Tilia may be required to send the U.S. Internal Revenue Service a Form 1099 to let them know that they have transferred a pile of money to you.  I don't recall what threshold amount of $$ triggers that requirement, and I don't know whether LL has to meet similar requirements with Canada or the EU or whoever else.  Again, you'd have to ask your tax accountant or lawyer how to deal with anything that LL may tell the tax authorities.

[Wulfie Reanimator]

11 hours ago, Sora Skyward said:

I'm confused on the legal side of things. in my mind its no different then say. selling a used bicycle on kijji or something like that. but correct me if im wrong. do i need to register my business with the Canadian government? or pay taxes? ect?

You do not have to register as a business. That said it, if you don't, it really is no different to selling your bicycle. Unless you're selling enough bikes to be making a significant amount of money, you probably won't have to pay taxes on it. I don't know how Canadian laws work, but in Finland, there is a lower limit to how much money you can make before you have to declare it as income and pay taxes for it.

[Lindal Kidd]

If I create a business in SL, it is not considered an actual business by the authorities.  I can take money I earn in SL out of my account and turn it back into RL money.

At that point it becomes "income".

Here in the USA, if the amount is not large, it's best to report it as "hobby" income.  If it IS large...for example, if your SL business is the main source of your RL income...then you should actually set up a REAL LIFE business entity and treat your SL work as a serious business.  So, "Sora's Fashions", your store in SL, is not considered a business by the authorities.  But when you change your $L into CAD it becomes income for "Sora's 3D Projects, Inc." in the real world.  You then report your business income and expenses just as any other business would.