Tier fees increased by tax

LL is a business, and therefore doesn't have to pay you VAT at all, just as you don't have to pay them VAT. VAT is only for business to customer transactions. Business to business transactions are VAT exempt.

It's not something they have a choice in. If they are a EU based company, and VAT is applicable. I have to charge it on invoices, and they have to pay it. It's simply the law.
It's not a loss for them either. It's completely deductable from their VAT incomes. (The ones they are now charging their eu residents with)

Maybe in the US. But in EU businesses do charge eachother VAT. It's recompensated on the vat tax deduction forms. It's basically a chain of VAT charges, ending with the consumer. There are exemptions to this rule, but it's not as clear cut by just being a business on each side of the transaction.

So you, even as a non US resident, first must convert it to USD? If thats the case, it makes no sense whatsoever to be paying VAT on that.

However, if you were to pull money from your RL bank account (Eg pay tier via CC), then I could understand being charged the VAT.

Ummm, you really, really, really need to go to an economics 101. I'm not even going to dignify that quote with an answer it will do you good to work out why you've just made an ass of yourself.

I am in the EU. And it doesn't work that way.

VAT is only charged to customers, by a business. Ebay customers buying from other Ebay sellers (who are not a business) you will notice, don't pay VAT.

Some companies still collect the VAT anyway, but LL being in control here with the cashouts, I can see them pointing to their VAT id and saying have a nice day

I nearly bought an island, I don't know if I'm lucky or not, now I have to double think what to do

Sorry, but it does work that way. It's not a sales tax.
http://en.wikipedia.org/wiki/Value_added_tax

don`t bother, with 19% my tier went to 351USD!!!

Can you be more specific as to webpage/info. That link is just a menu page. Would be interested as to what you have found.

It doesn't, or you wouldn't be able to claim your VAT id when making purchases on the Internet from ecommerce sites, such as Digital River.

You can get out of paying the VAT at point of purchase ONLY if you are a business with a VAT id. LL will simply say they don't owe you any and give you their VAT id. LL is not going to hand out free money, believe me

The official line is that you charge vat on any transaction, whether it's a business2business or business2consumer. The main reason is so governments can track all purchases. In current ruling the following goes:

* VAT must be charged if the buyer is in the same country as the seller. The buyer may be able to reclaim the VAT from the tax authorities.

So UK businesses and LL can normally not just use a VAT-ID, they need to pay and receive VAT, so they can report it on their tax forms.

* VAT does not need to be charged if the buyer is in a different country. The seller must record the VAT number of the buyer.

This is what LL is correctly doing atm. Non UK based companies also need the VAT-ID from LL to do the same though, if they cash-out L$ and do a RL payout.

* Certain EU companies are VAT exempt, these companies must not be charged VAT, regardless of whether they are in the same or different country to the seller.

Maybe this is the case for LL? But i need to see some kind of official documentation for this case.

It could be that UK tax law has an exemption to this, allowing local transaction to just exchange VAT-IDs. I'm not knowledgeable of local UK tax law.

They're in California.

Yes, they have a presence in the UK, but then, so does Ebay and Paypal... I guarantee you they will do it just like Ebay does, and a host of other e-commerce sites. Which means, they won't pay you. They'll say they're in California and exempt. Aren't multinationals grand

This is happening because of the ruling of the EU on non-EU businesses doing business with EU customers. So, these are the rules that will apply.

Still no mention of this on the blog or when logging in. I hope everyone affected got their email.

Shame on you, Linden Lab.

Except, they're not. They moved their billing and accounting and tax base to the UK. So they're officially now a UK company for the tax department. At least according to my knowledge.

It they're officially still a california based company, then ignore my ramblings. In that case VAT is not applicable towards LL.

I really am unsure, my being on the Continent and not in the UK means I don't get to claim VAT from LL anyway.

They should be taking my VAT id though, and it's not working. At least my account doesnt come up for renewal till February. I feel for those who have payments coming up soon.

If this is happening because LL changed their bank to the U.K., then they knew it would happen.

They had to have changed their bank to the U.K. because it benefited them financially in some way.

They knew that their European customers would end up having to pay extra tax as a result.

That was okay with them, as they decided ahead of time that the business they lost from customers as a result of the additional tax would be outweighed by whatever savings they receive from doing business through the U.K. bank.

(Which, by the way, messes up transactions right and left.)

That's how I figure it, anyhow.

To figure they didn't know about this when they made the switch would be to assume they are extremely dumb, and have no advisors whatsoever that knew about this VAT thing. Which is a stretch.

The fact that the wrong people are getting the e-mails, and the fact that they haven't mentioned this on the blog, is just par for the course for whatever LL does, in my opinion.

coco

If you're on the continent (like me), you're probably up way too late too for anything this complicated or boring.

This will hurt everyone who owns land in the short term if it leads to another real estate market crash. I am trying to decide if I should unload my mainland property now or...?

It's 5 am... and I have odd sleeping times Generally about at this hour.

I don't know.. I read all 18 Pages and still wonder how LL will handle it.

In case I as Customer pay VAT for something I (me) have to ask for VAT when I go to sell something even. I MUST declear that this Product YOU buy from me for xxxL$ is inkl. VAT already or there will be a add of VAT ob the annonct Sale price.

Say as sample you have to pay VAT on your tier.... You pay 17.5% (or what else) VAT.
Now you going to do something with your Land.. If you just live there.. nothing happen, only that you as a EU member have to pay more for the same Game as a NON EU Member.

But whatever bring you a profit from this Land.. is now under EU Regulations..?

Question..?

If I have to chage my Customer (renter) more (+ 17.5%) over the normal market price... who is goinig to rent from me...?

If I buy Land just for resell... how I can sell my Land with a increase of (17.5%) compair to this Landbarons who don't have to pay VAT...?

If I hold my Land to have my own Shop build on it... to I now have to ask VAT for my Products.

If I don't chage any VAT.. and only have to pay them I loss (17.5%) against all non EU player. This not sound right to me....

The only solution (in my mind and understanding) will be that from now on LL as ONE Woldwide Game Comunity can not longer exist.

LL himself have to create Gettos who People from diff. Countrys can live and do there Business (in Game) over there.

Sims for EU Member and Sims for NON EU Member... or. ???

WE can travel all over the SL World to have contact with each other... but we as (say sample) EU Member can not buy Land or any Product on a Non EU Sim... and a Non EU Member can't buy anything on a EU Sim...

Every (Hippypay) Machine know where you come from (tracking down your IP address)

There will be only 2 Scripts needed what everyone have to add to your Products...
One for EU Member and One for Non EU Member

After all... this is the way LL have to go now.... or its just up to us.. to except this now as usual and that as EU Member you have to pay more as other for the same Game.

I don't know how many RL People die to make all Mankind equal.. no matter if you are Black or Withe.
Is there from now on more than 1 Color in this Game..? Become SL a Game who its make a diffrent if you are Black or Withe or Yellow.

Thx Buddha I'am from Asia.. and a Non EU Member. should I be happy now...?
No.. I feel its hit me very hart to.. that People from other Countrys have to pay more to play for the same Game that I play.

I must say.. if this case happen now. I realy have to overthink my SL Memberchip and looking for something else.

In MY mind (and under US Law, so far I know) all Mankind is equal.
If LL start now to make SL Black and Withe.. sorry, than without me.
I'am not a racist, and I will not accept to be allow to make more profit than other, just becorse *The live in a diff. Country.

Sorry for my bad English

Bunchoo from Thailand

OK.....like everyone else in Euroland this landed like a bombshell. I was looking for posts about a possible bug when I ran acroos this thread. Some 3 hrs later after finding out through the grapevine I have now been informed by LL about what they are doing by email. Well I have now finished reading through "every" post in the thread. And now I will give my 2 cents (+17.5%).

Why wasn't I informed prior to this? I assume that the accountant/tax advisor who advised LL to move to Europe had also advised them of this? If they did why were we not informed that this was likely, oh and also why did all the supposed "SL Economic Experts in forums - shut up from now on!" not predict this one. For the sole reason that this seems a knee jerk reaction by LL then I minded to think the following the following.
LL were not informed by their advisor that this would happen and they have my full permission to take him on a ride out to the woods. Following this person's passage from the world LL should advertise themselves to Wall St as a clueless bunch of individuals, who are still the Pepsi drinking, won't leave their PC, idealistic, niaeve, grunge heads, self centred teenagers they were 20 yrs ago.

Next point, you have just turned over 40% of your user base; I will leave it to others for a more accurate figure of Euro members but I think I'm in the ballpark. I bought an island 5 days ago to rent out at low rents. Did you inform me before taking nearly $1700 off of me that this was in the pipeline? Obviously not! Now my friends are not surprised that you delivered my island within 2-3 days! (Anyone else who got an island recently surprised by delivery speed?).

So getting back to my point, what is the point in Euro users buying land to rent when US users can undercut us by 17.5% (as pointed out by Raymond)? Of course US members will start out at that level then over time push their rents up to maybe 16% in time. So in one foul misguided swoop you [LL] have caused a land glut (oh yes we are going to sell and get out) and drive land prices right down to 4-5 yr lows. Rents for a year will shoot up and then crash as people try to cover their costs. Any land sim you create will probably auction for 20%-30% below present market value and of course 40% of your buyers for islands have just disappeared off the map and maybe off your servers. I for one, once I've ditched my land, will be dropping down to basic, so factor that in as well.

On the question of VAT law (and I can only speak for the UK) I think it is challengeable. The EU countries do not have common rates of VAT or even what they apply VAT to and you seem to have taken a sledgehammer to crack a nut.

On the question of customer service you have stunk higher than a rancid gutter for some time. With this move you have dug out some old cheese rolled it in garlic and lightly toasted it over bull shit. I won't spout conspiracy theories here but your actions over the past few months do nothing to make me think that you didn't know this was coming and you hid and conspired to take advantage of this. Delete this if you will but post your own proof that I'm wrong.

And please, other people looking at this forum copy and paste for future reference.

And btw I'm posting this and the thread to Reuters and other financial media agencies as well.

Regards, the now completely disillusioned with SL, Sy Beck

Pretty much exactly!

i`ll bet they knew from the moment it was moved but they needed to cashout 2 new continents at a minimum of $1250usd and if they would have given us time to sort our stuff befor implementation, i`ll bet their land dump price got so low they would be the laughing stock of sl as everyone would be tiering down

that interface and check wasn`t made in a couple of hours

It is sad news indeed. It is the future of international economy and international banking. Taxes suck, but they help pay the government programs for the country you live in. This does not benefit LL at all and I think, if anything, it is a financial blow they delayed for the last moment. Of course, and as usual, LL was ________ (fill in the blank) about notifying its customers of this, but it should not come as a surprise.

P.S. Can I have your Stuff?