Illegal MMO Gold Seller Rakes In Nearly $500K, Draws Taxman — Days Later Devs Announce Real-World Trading Crackdown

Only in 2024 do we get a formal EU tax opinion that opens like a fantasy novel and ends with a crackdown on magic internet coins. Yes, we are actually talking about RuneScape gold, VAT, and a very real bill from a very real tax office.

'Gold all doth lure, Gold doth secure all things. Alas, we poor!'

What kicked this off

EU advocate general Juliane Kokott issued an opinion on September 11 in a case about Lithuanian traders who buy RuneScape in-game gold from players and resell it to other players outside the game. Think forum posts and DMs on Facebook, Discord, and Skype, with ads listing prices and contact info. The activity is exactly what you think it is: turning pretend coins into real money.

An inspection found the operation did brisk business: €415,484 in income between 2021 and 2023 (roughly $488,000 at current rates), with a big spike in 2021 at €199,580. That blew past Lithuania’s €45,000 small business threshold, which means VAT enters the chat. The trader did not account for VAT, so on January 9, 2024, the tax authority told them to pay €46,688. They appealed, and the case now sits with the EU court via a request from Lithuania’s Tax Disputes Commission.

• 2021-2023 income: €415,484 total; €199,580 in 2021 alone
• VAT registration threshold in Lithuania: €45,000 (exceeded)
• Tax bill issued: €46,688 on January 9, 2024
• EU advocate general opinion published: September 11, 2024
• Jagex RWT crackdown announced: September 16, 2024

What the seller argued

The trader tried a couple angles to reduce or avoid VAT:

First, classify RuneScape gold as a currency transaction that should be VAT-exempt under Article 135(1)(e) of the VAT Directive. That exemption covers dealing in currency, bank notes, and coins used as legal tender. The problem? You cannot pay your electricity bill with RuneScape gold.

Second, say it is at least a multi-purpose voucher. Voucher rules change how and when VAT bites, and in some cases can keep the sale outside current VAT scope. There was also a variant of the argument that, if anything, only the profit margin should be taxed like second-hand goods.

What Kokott thinks (and why it matters)

Kokott frames the case as the court’s chance to deal with a new kind of gold trading for VAT purposes: someone buying an online game’s internal 'currency' from players and reselling it for cash. The opinion acknowledges that a prior ruling stretched the concept of 'legal tender' to include bitcoin in a Swedish case, but RuneScape gold is not bitcoin. It only functions inside the game. That makes it play money, not money-money.

On the voucher claim, she is just as blunt: swapping in-game gold for a 'magic sword' inside the game does not make the gold a voucher. It is a service already consumed in the moment it exists for players.

Bottom line of the opinion: RuneScape gold does not qualify for the VAT exemption for currency transactions. It is 'a consumable benefit' within the game world, not legal tender nor a voucher. The court still has to issue its final decision, but if the judges follow the opinion, the Lithuanian trader will not be dodging VAT on those sales.

There is an 'inside baseball' twist, though. Kokott suggests the law needs to keep pace with digital items. She floats the idea that parts of the VAT Directive should be read more broadly to cover transferable non-tangible goods when they are traded like physical goods in the real world. If an item (like in-game gold) is actively traded on a secondary market in a way comparable to second-hand goods and carries 'residual VAT' in the chain, that could justify a specific VAT treatment. Deciding whether RuneScape gold actually fits that description is up to the Lithuanian commission handling the case.

The two big questions on the court’s plate

To translate the referral into plain English: 1) Is selling RuneScape gold a VAT-exempt currency transaction? If not, 2) what exactly is the taxable amount — the full sale price, or just the profit margin from buying low and selling high? Kokott answers the first with a clear no. On the second, she points to that broader, tech-aware approach and leaves the detailed classification and valuation to the national body, depending on how the market actually works.

What the tax pros are saying

RSM UK (audit and tax specialists) put it neatly: the seller tried to argue the gold was like a voucher (so outside VAT) or at least a second-hand good (so only the gross profit would be taxed). Their takeaway is the same as Kokott’s subtext — VAT rules need to catch up with how games and in-app economies actually operate, because clever new purchase models can have surprise VAT consequences.

Meanwhile, Jagex slams the door on buyers

Five days after Kokott’s opinion landed, RuneScape and Old School RuneScape developer Jagex rolled out a tougher stance on real-world trading — the same market this case lives in. The studio says it is focusing harder on the demand side, not just the bot farms and mule accounts that supply the gold.

Jagex’s point is simple: buying gold creates a financial magnet for bots and throw-away accounts, which floods the economy and hurts legit players trying to sell on the Grand Exchange. The plan now includes escalating punishments for anyone buying gold, up to permanent bans, and confiscating items from offenders. None of this is brand new policy, but the enforcement push is clearly bigger — RuneScape players are already reporting a fresh wave of RWT penalties.

Did the EU case light a fire under Jagex? Maybe, maybe not. I asked the company if Kokott’s opinion factored into the timing. No response yet. Either way, the legal and developer sides managed to hit the same headache in the same week. For a case that literally argues about whether a magic sword economy should be taxed, the timing is almost too perfect.