The regulations regarding online services have recently had a shake up in Europe and I muss confess to not fully understanding them, the best I can do is suggest you contact the EU goverment (prefferably with a petrol bomb) and ask.
As I understand it, as a resident of the UK, I now have to pay 17.5% taxation on online services.
This effects me as a user not as a web host so it is something that ALL web hosts have to adhere too.
I'm not fully up to speed on the matter though, so I suggest you try to find further information. Paying the tax from the point of view of an MMORG host would necessitate having a company.
Decleration of income is dependant upon the country you live in, in the UK I know this would be considered a second income, taxable as a second income, flag you as self-employed thus compromising any opportunity to claim benefits at a later date, and must be declared to the Inland Revenue.
HOWEVER... If you are doing it as an amateur you can found a non-profit making organisation which receives the income. As a non-profit organisation you are entitled to keep all of the income without tax, but you must show the expenses going out. You are allowed to maintain a 'reasonable' float, and nobody has ever worked out what reasonable is.
If you charge credit cards you will need a credit card service provider such as World Pay. From the customers point of view Paypal is prefferable to those people who already use Paypal, otherwise services such as World Pay are more prefferable as Paypal requires something like 90 days to register.
Personally I preffer World Pay because their offices are 20 minutes drive away from me, which makes any complaint I may have that much more easier to 'impose'.
Pneumatic Dryll