If anyone is selling games as a private person or firm, company, how he is paying his taxes then? How to prove the incomes when they are online transactions?

how do you prove what you earned? Well most online payment services will provide a report on what you sold and what you earned. Also, at some point that money gets paid to you - normally into an account or by cheque. Your bank statement wil show details of that.

There is more than the company reporting it to you. You should also expect your online transaction processor to report it to the government.


For example, in the United States, financial institutions (including PayPal and other sites) are required to report all transactions over a certain value, and may be required to report all payments of any value made to you. You as the individual are required to report all income even if it wasn't documented, regardless of the source. Auditors routinely obtain records from online transaction processing companies like PayPal, even if they aren't banks. If you are audited, the government auditor can request the list of payments made to you.

Rules vary by location, so check with a local tax adviser for the actual law in Bulgaria (or wherever you are).