Tier fees increased by tax

Lindex transactions, as far as I can see, are "transactions between residents" and thus there is no extra charge on them. (Well, there might be on the fees that LL charge, but perhaps they are sucking that up.)

There are specific regulations for "electronic services" in general, which state that when the service is provided the tax concerned is paid by the provider, on the basis of where they are. Thus I do not pay VAT on my US web hosting.

My electronic services with SL are entirely US-based, apart from if I ever talk to the one or two Lindens in Europe I suppose.

So.

example of how they think

release continents quickly to cash in
hide VAT coming so ppl don`t dump their land to fuckup their land sales
introduce VAT overnight after their done with the land spamming and yell to every one "HAHA FUCK U LOL!!!!" in an email hours after implemented

This will make it much more difficult for European Residents to compete in some markets. Recovering that 20% isn't just desirable, it might make the difference between living comfortably and living on the street. And yeah, I sure hope Anshe has a solution. *monitors tax discussions*

Yeah but if you're from Ireland you won't ever be able to delete prim babies... we at least can choose to delete our prim babies before they go into inventory.

If one has a registered company and is licenced for collecting and remitting of VAT in their locality, then since LL has opened this can of worms, this sort of thing is probably likely and very probably not just legal, but required:

"Dear Linden Lab,

I recently sold L$XXXXX for a net sum of US$XXX in a transaction facilitated by the LindeX. As you already have my VAT / tax license on file, you will understand that I am legally obligated to collect VAT on my sales. Please accept this missive as a legal invoice for the sum of US$XX of VAT on said transaction, which you may credit to my account. Terms are due upon receipt. Thank you for your attention to this matter. My VAT number, already on file, is XXXXXXXXXX.

Sincerely,
(my rl business name here)"

See, if they are legally obligated to collect VAT on RL currency transactions, then they are just as obligated to remit VAT on RL currency transactions.

For what it is worth, I am not in the EU, but I *am* a legally registered company and I am registered to collect VAT in my country, on all RL$ sales I make. If SL ever registers as a company in my country so they can charge me tax, I am prepared in turn to charge them tax on any RL $ sales I make to and through their service.

-Atashi

From HM Customs & Excise site

What items are VAT exempt?

In broad terms the following are subject to exempt rate VAT, which means there is no charge to VAT at all on their sale:

- sales of most land

- some rents

- insurance

- banking

- betting and gaming

- postal services, but only if supplied by the Post Office or their agents, and not by anyone else(so if you recharge postage its standard rate)

- most education services, but not most training courses

- most medical services

- non profit making sports activities


From the Lindens...

Anything that you pay Linden Lab for will have VAT applied. This includes:

Premium account registration <---- paying for a game - gaming, surely? - exempt
Purchases from the Land Store <---- land sales - exempt (though you pay for solicitors fees)
Land use fees (tier) <---- rent - needs examining, but possibly exempt
Private Region fees <---- rent - ditto above
Land auctions <---- land sales - exempt

So we are being charged VAT on services which are exempt from VAT... explain that one LL

But for women from Ireland there are (have been?) boats that would take the women who wanted an abortion out of Irish territory...

We must able to find something for SL like that... Hmmm.... maybe an open source server somewhere?

Morwen.

And it isn't just 17.5% of profit, either. Say if a resident is paying US$295 tier, and is collecting US$395 in rent. Up until now, that of course represents a fairly reasonable US$100 profit. Now if you add 17.5% to the outgoings, approx an extra US$50, that eats up 50% of the profit margin.

The likes of Anshe will be fine, as they will be able to reclaim their VAT (assuming the laws are similar to here in the UK)

LOL. Your virtual real estate and rentals are NOT "rent" or "land" for purposes of the UK's tax law. I know it would be nice to argue that to HM Customs and Excise, but to be honest, GL with that.

But Gaming is gaming.... hmmmm

Over here a company can indeed reclaim tax.... but I don't have a company.

Another thing to consider is that when you start to reclaim VAT that you may get to deal with other tax-laws (which may make you pay more in the end).

Morwen.

LL is a web hosting service, ultimately. While the gaming part is a legitimate question, the land and rent paid are not for real life real estate.

No that means gambling, betting and the like. All of these things are well known to tax lawyers. Online "gaming" like SL is a VATable service payment for an online service, not money used for a wager. I know it sucks, but the answer to that is to lobby Mr Brown and his government, not to claim that any online game fees are not subject to VAT, when they are like other fees paid for services unless otherwise exempt.

Indeed. This is going to definitely change the landscape.

Considering the quality of service sometimes, the term Value Added seems almost comical.

I hope we can keep the socialized medicine debate out of this, we all have our opinions on it, but this isn't the place. All I can say a 17% raise in my SL expenses would send me to the exit.

I'm in the same boat as you Morwen, I just meant that the way the likes of Anshe are set up, they will not have to worry.

I demand my tax rebate already! Its a gamble if I can ever log in some days!

I've got a perfect way to put 'unwanted' prim babies to work:
http://www.slexchange.com/modules.php?name=Marketplace&file=item&ItemID=291334

/me ducks stones, eggs, and week-old pies.

-Atashi

Haha ... good point. The inventory system is also like a casino.

LL can expect VAT surcharges on all my L$ sales now, as they're a UK based company, i have to. Especially since they're simply able to DEDUCT these surcharges from their VAT tax payments.

LL you can't have it one way. If you're going to charge customers VAT, we as companies need to charge LL for VAT too.

Just need to figure out the billing now.

I wonder if this VAT exemption thing is as easy as just filling in a number on the account page. I'm afraid i need a little more than that...

Does anybody know the official date, when LL billing moved to the UK? I need to know from what date to start billing them.

LOL. Your virtual real estate and rentals are NOT "rent" or "land" for purposes of the UK's tax law. I know it would be nice to argue that to HM Customs and Excise, but to be honest, GL with that.


It's not me calling it Land Sales... Land is Land, virtual or otherwise, if it's sold as Land. And isn't tier money paid to contribute to the upkeep of the servers based on the amount of land you own (or "rent"?).

Calling something by a name and then not classing it as that surely contravenes all kind of laws... either it's land or it isn't.

No.

From the perspective of the law, "land", for legal purposes, is equal to "real estate", something listed in the land register. What you have in SL is the right to zeroes and ones on a server in the US. No UK court is going to agree that this is "land" within the meaning of the UK's VAT regime. Again, you can try, but it's not really worth the effort. The law knows no such thing as "virtual land". "Land" is "real estate" and nothing else.

Now if you want to sue LL for fraud by describing this as "virtual land", you can try that. You have to surmount the TOS hurdle, but I would expect that courts in the UK and elsewhere in Europe would not be nearly as deferential to what's in the TOS as a court in the US would be, given the difference in consumer protection laws. So, that may be an avenue for you if you feel aggrieved here.

Well, it is even 19% over here. We have two percentages for VAT. 19% for luxury goods and services. 6% for the rest.

For me it is not the problem that I have to pay it. I am used to it, belongs to the place where I live.

The real problem I have with it is how it is implemented and pushed through without on forehand so people could think and react on it.

And as said, for me it is just a small amount. I truly pity who are facing large raises in payments now.

Morwen.

Psstt... keep silent. Before we know it all our inventories will be deleted.... Ermm, that makes me ponder.

Morwen.

<sighs>

Maybe i'll just have to burn Gordon Brown then

<perks>