Why are people from the EU complaining about VAT to LL?

I’m wondering why there are a lot of people from the EU on the boards complaining to LL about VAT and saying such things as “LL is committing fraud” etc. I understand that LL should probably have given you the heads up first, but really, this is not LL’s rule or law, it is a tax implemented by certain countries. LL HAS to pay the tax and thus so do you. If you don’t like paying taxes in your country, try voting for someone else. Here in the US we don’t have to pay VAT, yet we also don’t have free healthcare. I may not have to pay the couple of hundred bucks for VAT when I buy land in SL, but I DO have to pay several thousand USD per year for health insurance.

In summary, the VAT tax is not LL’s problem. It was enacted by your home country. If anything, it will hurt LL and force them to add code they otherwise would not have. If you don’t like it; move or vote for someone who will cut your taxes. Nothing’s free. Now, back to work!

The reason people are complaining is there was no warning at all. Tier has suddenly increased even though it's for landholdings prior to us being told as it's based on the previous billing months ownership.

All the prices on the site do not give any mention of the tax to be added, which is illigal in the UK. When dealing with the general public you normally include it in the published price and if you don't it has to be clearly labelled as excl VAT.

Added to all this, think how many European island owners, mainland sim owners and land dealers who could end up not being able to afford the huge increase and not given time to tier down.

The majority of those in the EU accept that the additional cost due to VAT is not LL's fault and is unavoidable - although there are a few question marks over whether VAT really does apply to *all* EU member states (but it probably does).

That's isn't to say that they aren't unhappy with the increase - who is happy about being charged more?

There are also real concerns on how those in the EU can compete with those outside the EU in the land and rental business, especially given that LL dumping of new continents have squeezed the profit margins to the absolute minimum - although it is recognised that there are no truely fair solutions.

The real anger targeted at LL is on the lack of notice:

i) culturally, and in some cases enforced legally, unless otherwise explicitly stated, the price quoted in the price actually paid, and any applicable taxes are assumed to be taken from that price, not added to it. As such, culturally and legally, the increase *is* seen as an increase in the previously agreed charges from LL

ii) in the case of mainland tiers which are paid in advance it is seen as a breach of contract to charge a different amount at the end of a billing period than that agreed at the beginning

iii) in the case of premier membership and island fees, EU customers expect a period of notice for any increase in fees. In some EU states this is a legal requirement, and LL have in any case given an obligation to give at least 60 days notice of island fees increase.

As LL actually implemented the increase *before* people received e-mails about it, LL is regarded as breaking its moral, contractural and legal obligations to EU customers by implementing the increase with no notice whatsoever. Most of the anger is due to this.

Matthew

If you agree to sell something for X money, but then charge them for X+Y money, it's clearly fraud. If we'd been informed before the next tier month, it wouldn't have been so bad.

Pan Fan, this thread looks like a troll post to me, your ignorance on other economies is shocking. however, I will give you an answer.

Most people complain about it not in the right way. But there is a reason to complain.

that the EU asks for VAT has a simple reason. the idea is to create equal chances for inner-eu-merchants and the rest of the world, since the advantage of not having to pay VAT "abroad" is gone.

now the problem with lindenlabs is - they just don't allow any competition on the sim market.

there is no european sim hoster, there isnt even a 3rd party sim hoster at all.
this basicly makes the EU's VAT rule turn exactly the opposite way it is supposed to work.

in addition, Lindenlabs did it without any warning (as usual), which is just unacceptable.

I've been complaining about it just to annoy Pan Fan.

1) It is an American company, why should they adapt to your culture? In America, the price you owe the retailer and the taxes you owe on the purchase are two different things.

2) You are still being billed the same price by LL. Only now you also have to pay the pound of flesh that your parasites in government demand as well.

3) Your fees did not increase. You just have to pay your government taxes now.

The last I checked, the person declaring it fraud was being appropriately mocked and dismissed in their "it's fraud!" thread.

Of course it's not fraud, but people are legitimately angry that LL gave no notice on this. I know I'd certainly be angry if LL just tacked $60 onto my bill without warning me in advance.

The worst part about it is that Robin (allegedly) claims that LL has been paying the VAT themselves so far. Why is that bad? Because it means LL did not SUDDENLY have to make this change to avoid illegal tax evasion. It means they knew about this tax and had made a business decision in the past to eat the cost, but have now made a business decision to pass the cost to the customers. If this is true, there is NO reason why they shouldn't have given 2-3 months notice of their intentions, giving people the opportunity to tier down and sell islands before the addition cost was implemented.

No one likes taxes, and the ire at having to pay them is almost always universally directed first at the party that's collecting it. If the U.S. government increased the federal gasoline tax effective immediately, you can bet the gas station owners would be first to take the heat when the prices rise. Incidentally, in such an event, the gas station owners wouldn't be able to give advance notice, either. There's no such thing as a grace period when it comes to paying taxes.

This American company also has an office in the UK making it an International company. The UK branch is also the one that deals with all the payments and will be the reason the VAT is being added. Surely the payment office in the UK should follow UK trading laws?

And how exactly do they stop anyone from competing with them?

But would the gas station only inform you after you have filled the car and can't give that tank of petrol back? What happens when you are stood at the till with your only $50 and told you need 25% more?

There are some silly fools who are screaming and yelling and complaining about LL regarding the VAT just like there were some who complained about them regarding the gambling issue. Both were out of their control and they needed to act.

Most are legitimately complaining because there was no notice given.

Focus on those with the legitimate gripe and brush off those who just want to stir things up.

Now they have a base in Brighton (a town which arguably has a lot more in common - culturally and politically - with San Francisco than much of the American Mid-West) they will certainly have to adapt to our culture, and our way of doing business.

In Brighton, the UK and Europe, where Linden Lab has a registered business presence - where Linden Lab processes payments from all over the world and pays VAT like any other British business - the price we pay is inclusive of tax, and it is their responsibility (as a British business, processing payments on British soil, yada yada yada) to ensure their advertised prices reflect that.

Indeed, that probably explains why our secondlife.com/accounts pages list a price, inclusive of VAT.

/predicable eurobashing agenda snipped.

Sorry your just too stupid to even reply too, although I'm contradicting myself by this reply, I feel it's necessary to point it out.

I think there are a couple of reasons for the outrage.

One is the obviously clumsy and ill-thought-out way LL started passing it on.

I suspect another is that Europeans don't usually think much about the VAT they are indirectly paying when they buy stuff. The way it is imposed in Europe - paid by the manufacturer or distributor, not the retailer - seems designed to make it as inconspicuous to voters as possible. Successfully so, too, IMO, because it is a sales tax, really, and it is more than twice what the comparable but highly visible sales taxes are here in the US (they are applied at the state and local level, not the national level, BTW). So it comes as a shock to them just how burdensome it really is. In the US, I can practically guarantee a sales tax in the vicinity of 17.5% would result in insurrection.

And finally, I think some are really upset because they are in the land business and are finding themselves badly hurt in the marketplace or put out of the business altogether.

Can't say I blame them on any of it, but yes, if they don't like the VAT they need to take a look at the EU governments, not LL. The clumsiness shown, of course, should be laid at LL's doorstep.

I'm furious because LL just tends to roll from one corner to the other. Regarding to the casino ban and maintenance hours EU citizens are totally ignored but if it comes to VAT we suddenly exist?

Or LL goes global and doesn't enforce us the laws of the USA or LL just closes it doors to non US citizens. Where is al the fun for us europeans? We can't gamble because yankees have some rules. We have to flag mature land as mature for a nonexistent reason and we need to pay more for this than everyone else? LL should do some gestures to their european customers.

LL acknowledges that they have EU customers, now they also should acknowledge our rights.

What really pissed me off in the mail is that they identified us as EU residents? I already gave that info when i signed up. When I asked questions half a year ago about VAT and European companies they acted like I was talking swahili and never answered my questions. Now they finally seem to realise we have other rules in the EU. I don't really care about the extra VAT, it's the way they enforce it. A price in the EU has always VAT included if not mentioned so to me it sounds LL is doing illegal business for years now. They sold me a product that already contained VAT.

Yeah but we've already been paying VAT on SL since at least 2003, unless LL has been committing tax fraud which I very much doubt.

My previous reply to Chris Norse was probably uncalled for. So here is my take very simply put why what has happened is a bad thing.

Imagine your a US citizen, you start playing SL and are told its $10 to be a premium member, $1900 to buy an island and $195 a month to run it.

Then you get billed that plus sales tax, are you saying you would just accept that and let them get away with it?

Even though the explanation they, SL would give is exactly the same explanation the European players are getting?

And top of that if your in a State that pays sales tax and your friend in another state doesn't pay sales tax and your competing to out sell rented accommodation?

Well it depends upon whether people actually vote with their feet and tier down. That would be a problem for LL and other residents because that could very well lead to tier increases across the board.

It's the lack of notice that people are complaining to LL about. It's expecting your bill to be X and then finding it's X+Y with no notice. The decent thing to do would have been to say, from your next billing period VAT will apply. People would still have moaned but those pointing out it's not LL's fault would have been completely right in those circumstances.

LL have handled this very poorly and it's inexcusable really. People could have tiered up or bought islands on September 26th, a time by which LL knew damn well that VAT was going to be applied. There's no excuse for the lack of notification.

It's not gonna happen unfortunately. Despite the supposed strength of feeling, despite the sheer number of Brits I've made aware of a pre-existing Downing Street petition requesting the abolition of the E-Business Directive, only four have signed in the past nine hours.

Sure, it's unlikely to result in a policy change, and even if it did, it won't be a short time coming; but I believe the deadline of the petition is timed to coincide with a review of the E-Business Directive next year, and it would surely be beneficial in the run-up to make politicians aware of the animosity towards this policy.

Hell, the UK government was already against it in 2003 but got outvoted by other states. If the rest of Europe is as ambivalent as these outraged forum Brits who just ain't outraged enough to register a complaint with the government, well, we ain't got a hope in hell of getting rid of this policy have we? And no right to complain, the next time we're suddenly hit in the pocket.

LOL! OK. I'll bite.

Let's get this thread shut down on the basis that it's unrestained Yank-bashing.


"why should they adapt to your culture?"

Because they are operating / doing_business over here.
i.e. outside of the good ol' USA
You don't know where you are Toto, so stop pretending that it's Kansas.

Much of the dangers in this world are down to the USA's total inability to comprehend, or even to attempt to do so, that the rest of the world has a different valid viewpoint.

Ladies and Gentlemen. I give you the new Godwin....
Forget about Nazis..... They are sooooooo old.
YANKS!!!!

WTF are the USA doing in Irag???? ANd soon Iran??
You don't understand that messing with other countries in the pursuit of oil and global domination would tend to piss off a few people ???



OK!



I'll leave the thread to disintegrate now.

I wonder how American customers would react if Lindens hoisted land tier prices by between 17% and 20% and applied it to the next bill no warning no chance to adjust or sell land. Would people in the US simply sit back and accept it ? I dont think so

Im sure knowing how vociferous our American friends can be we'd be hearing quite a lot.

As Ive said before Americans should be wary in case they decide on sudden land tier increases all round

And dont tell me they HAD to do it... VAT has been around ages now. Another month or two to allow people to decide how to deal wouldnt have hurt anyone...

In the US, applicable sales tax is not assumed as part of the sales price.

But I wonder how many EU players wondered or even asked about VAT before all this started? I imagine most EU citizens know there is no "VAT" in the US.

I have lived on both sides of the pond and if I were buying a "product" from an American company, I would ask if that includes VAT or not. But on the other hand, if I wanted to save some money, maybe I shouldn't ask!