Tier fees increased by tax

Linden are slowing going to lose european people in SL. I live in UK and will have to pay tax, Im not going to buy any land so there Linden!!!! This is another way that SL will end up going offline because of lack of funds.

Who makes these policies in Linden and have they do think about people outside the US?

Um, Did LL make the tax laws in the UK?

It is your tax-happy government that is the problem. LL's only fuckup was not telling you about the change in a meaningful and timely manner.

Hi,

It's in any way not according to any regulation in the EU to do it in this way.
Any consumer organisation in the EU would confirm this.
First you give notice to the customer of the change, they firm gives the option to agree or not and this to go effective on the next billing period. NOT ON THE CURRENT.
This is just not to believe!!
Great promotion Of SL

Regards

It is not LL's only mistake. They are continuing to not advise EU users on their pricing page that pricing does not include VAT. That's a huge mistake to be making and something that should be rectified ASAP unless LL want to get themselves into a shed load more trouble.

Wrong.

LL's biggest fuckup was setting up in Brighton at all without considering the taxation consequences.

If they hadn't setup there, the VAT situation would be unenforcable.

That's why they haven't been charging VAT since 2003.

They had no business presence in the EU.

There is a new blog post about a restart postponement (obviously more important to LL). Some people are posting to it asking for a blog post on the VAT charges. Some are then having their posts deleted by LL, this really sucks.

...and they're processing American's payments in the UK without charging them 17.5% extra. Whooopsie!

True, that's the even bigger fuckup.

A cultural difference which I think many in the US (and clearly not LL) don't realise is that over here in the UK (and I believe other places in the EU), the price advertised *is* the price you pay.

In the US, (I'll use a shop analogy but the same applies online), the price tag is the base price. When you go to the till they add any appropriate sales taxes, so the price they ring up is often higher than the price on the tag. This comes as a surprise to many UK (and EU) visitors, since they are expecting to pay the price on the tag.

Here, when a price tag says £5, you expect to take the item to the till, hand over a five pound note and thats it - is the cashier said "sorry, that will be £5.50", they'd get short shrift. Any tax/VAT due is the responsibility of the seller and comes out of that £5.

If VAT were to increase (and it did increase from 15% to 17.5% about 15 or so years ago), prices would not increase overnight. Often the sellers would cover the increase themselves, and gradually increase prices over time.

As such, when we agreed to pay LL say $295 for an island, or $195 for a mainland sim etc. we expected to pay $295 or $195 per month - no more and no less. If any tax, VAT or whatever is due, when expect that to be LL's responsibility and to come out of that $295 or $195 a month (indeed under UK and I believe German law, the price quoted *must* include VAT unless explicitly indicated otherwise).

Also, over here, we expect (and indeed are legally entitled) to be given notice of at least a billing period (i.e. a month) for any increase to that amount.

That is why LL will lose EU customers - it has essentially increased its fees by 17.5% - sent out the e-mail notice *after* doing so, and for people paying mainland tier this is effectively retrospectively applied to the current billing period (under UK and I believe EU consumer law they could be taken to court over that, and we know the TOS clauses trying to limit liability to be covered under California can be overturned by the courts).

So to summarise, it is breaking EU laws by displaying prices which do not include VAT without explicitly stating so, and by increasing charges previously agreed without prior notice.

What LL should have done would be to announce a new charging policy - namely that EU customers would be charged in Euros (including VAT), and given a Euro price list such as

Monthly Island Fee: US: $295; EU: 245 Euro
etc.

(if you do the math you'll see that the EU price includes VAT)

Then given a date when the new policy would take place - allowing at least a month notice - e.g. 1 November if announced now.

Matthew

yes thats against the law at least in germany.

I think they are taxing EU residents twice

First when they buy l$ and after when they pay land fees using already taxed l$ converted in us dollars.

here in italy 20 + 20 is 40%

Is there a lawyer in the house?

perfect explanation

Indeed - VAT should only be charged on any outstanding balances charged to a credit card or paypal after any US$ you have in you account have been used to pay fees.

We'll have to see if LL have implemented the system like that.

Matthew

Web businesses are as pissed about this tax as their EU customers are. No one will redesign their online shops to give us the correct pricing. I recently bought some shareware and was also given the price without VAT that everyone outside the EU pays. Only during checkout the EU VAT was added. We'll either have to live with that or emigrate.

@ Walker Moore: LOL at your new signature. Thanks for the smile today. I needed it.

hehe! You're welcome! What a nightmare trying to submit it though.
503 .. 503 .. 503 ..

http://www.out-law.com/page-717

Quote:

"The European Commission has proposed a new Directive that will force non-EU companies to pay VAT on a range of goods delivered electronically.

Under the new rules, any company not registered in the EU but which has annual sales of internet services and paid-for TV in excess of 100,000 Euros (£62,000) to EU customers will have to register in a member state and pay VAT at the prevailing national rate."

The article is from September 2000. This law has been in place for 7 years now, and all major non-EU companies like SOE or Blizzard add this tax. We could ask a European and an American WoW player and compare their monthly fees.

503 is the New 42. Oh and based on the past 2 days I'm suggesting we change the group name to The ______ Cartel.

True - but at least you were told the total price before you confirmed the purchase (I hope). If you were buying from LL, I wouldn't be surprised you would confirm one price on the web based system - and *then* get an e-mail saying they'd charged you that price plus VAT.

Matthew

Still 65 open comments on the latest non VAT blog post to ask for a VAT blog post:
http://blog.secondlife.com/2007/09/28/rolling-restart-monday-oct-1st/#comments

Agreed - but that directive just means that LL needs to pay VAT on its sales to EU customers. It does not permit LL or any other company to increase the amount a customer has previously agreed to pay without prior notice.

Matthew

"Gaming" as far as gvernments are concerned means "Gambling" It's the official term for it. So they are talking about slot machines etc as "games".

LOL. It wouldn't surprise me if the next time I visit, all the textures are replaced with MISSING IMAGE.