Individual Taxation And The Metaverse

In this article, we explain the individual tax implications of working in the metaverse.

Personal tax on worldwide professional income is usually governed by the law of the place the work is done.

This means that individuals are liable to personal income tax in the state where they physically work, whether this is their state of residence or another country. This is called the 'territoriality' principle. Double taxation can arise due a conflict between this territoriality principle and taxation on worldwide income in the state of residence. Tax treaties and agreements between countries can help to alleviate double taxation.

Does this mean we should be worried about taxation in the metaverse, this new, fully immersive and interconnected virtual world that allows users in their capacity as workers to engage in professional activity?