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

And between you and me, do you really believe that LL has been remitting VAT all along?

Fail.

Just because the rule is in place, doesn't mean LL, in fact, has been remitting it.

Back to logic lessons, dearie.

yeah, right
if they said they needed to add another 17.5% to federal tax to 'combat terrorism' or 'protect the children' americans would rollover for it with little more than a wimper.

Kind of a long URL, hope it works... here is the official word from UK customs and excise.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_001173&propertyType=document

Oh you think so? I guess you don't understand just how much Americans hate taxes then -- regardless of how they are used. There is no support here for increasing taxes -- pretty much ever.

It is entirely your prerogative not to sell outside the US, just as it is ours not to sell to the US.

If LL chose that course of action, there is enough interest in SL and Virtual Worlds in the education sector in the UK that we could probably put resources to accelerate to the OpenSIM development.

And don't forget that Nicholaz Beresford who has probably done as much if not more to improve the client stability than any employee at SL is based in the EU!

Matthew

Are you accusing LL of tax fraud here? Just to be absolutely sure. Muppet.

In effect, I do not believe they have been in compliance with VAT rules, no. If you want to call that tax fraud, muppet, then that's your choice of words.

So call the police then.

I couldn't possibly comment

However, it is LL's responsibility to remit VAT not mine, and it doesn't give LL the right to increase the amount they charge my credit card without notice.

Matthew

as if that would actually make a difference?

Not my problem.

Yes, of course, because it doesn't matter what Congress does, they just get automatically re-elected. It's not like people pay attention when their taxes are raised or anything.

However, it does mean that Europeans were entitled to expect that the company they were doing business with (LL) was in compliance with the law.

I had actually also assumed that LL were already doing this in the way many companies do - effectively giving Europeans a small discount - so that the VAT was already taken care of in the prices we were paying.

Saying that it's OK for Europeans to be penalised for this because it's their government is pretty silly - does every American support all the consequences of every decision the US government makes?

so we agree then

Robin has on two seperate counts claimed LL has been passing VAT on to the EU from as early as July.

The only truly appropriate time to pass the VAT on to their customers would have been at that point, but instead they silently decided to simply get less revenue from their EU residents.

All of a sudden LL changes its mind and decides that it can't continue to keep loosing 15-25% of its EU revenue (I don't have any issue with that decision really) and decides to increase prices but under the guise of starting to comply with EU law although they've been complying for a few months already.

LL should have either never decided to silently start cutting into its own revenue (or at least not as anything but an announced temporary measure), or it shouldn't have suddenly reversed that decision.

If they had made an announcement in July that were going to start complying with EU law, but that they would absorb the cost for the next two months then very few people would have had much of a gripe with LL, the gripe would have been with the EU instead where it belongs. They'd probably have gotten quite a lot of praise for volunteering to eat the costs for a whole two months.

Agreed - the imbalance that this causes is *not* LL's responsibility.

It is LL's fault that it has driven the price of mainland so low that it has squeezed profit margins so low on land and rentals that the little profit margin that does exist is wiped out for EU customers by the increased caused by VAT.

It is a concern for LL that this and the imbalance may drive a lot of EU customers out of the land and rental market or even out of SL entirely, and the whole VAT issue even if handled properly with proper notice will have some negative impact on the SL economy and ultimately that is not good news for SL and LL as a whole.

Matthew

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000902&propertyType=document#P143_22587

Specifically, the first and third flowcharts are of interest on that page (you'll need to open them in a pdf viewer).

As far as I can tell, it would appear that whether or not LL is considered to be registered as a business within the UK, it would still be legally obliged to charge VAT against its UK (and presumably all EU, although the flowcharts only describe the UK customer case) customers.

On a practical level, there isn't any way that VAT could be enforced if LL had never opened the UK office. It would be breaking EU laws in doing so, but I'm sure that wouldn't be the first time they've done so. They've already done so by failing to give legally required notice of a change in the amount charged to the customer.

Well I'm sorry you assumed that the pricing -- which is the same globally -- was intended to be a discount for you, as would have been the case if LL had been paying the 17-25% VAT out of that price. To me it seems crystal clear that LL did not comply with the EU's pricing rules -- and they may be liable for that in some way. But all that is happening here is that LL is coming into compliance with the VAT rules in a way which will not reduce their intake from services relating to SL, which I can virtually guarantee you was never LL's intent. To the extent you are being "penalized", it's Brussels that is penalizing you by having passed this 2003 rule stating that such services are subject to EU VAT to begin with.

Youre so wonderfully forceful Victorria (growwwwwwl)

Yes two months ago -- not since 2003, which was what was claimed earlier in this thread.



Much more likely, having lived through these kinds of decision making processes inside organizations, was that it was decided in July to start remitting while in the meantime they settled on a solution, including the mechanical side of it, for collecting and remitting VAT from European customers. Now, I agree that LL ought to have communicated that at the time -- they would have helped themselves a lot in customer relations, as well as in terms of compliance.

Lighten up, Brad! I am only asking questions for what I do not understand, this is not an attempt to troll and I am insulted you call me an idiot. Do you call everyone an idiot who asks a question?

The only stupid question is the one that isn't asked.

Thank you to the others that take the time and helped me understand.

The ramifications of that would be SO very interesting.

For the first time since the E-Business Directive was implemented, a business would be leaving the EU in order to avoid it.

BUT, according to the misguided legislators in Brussels, the company should be paying it anyway. Yes - even though it no longer has a base within the EU.

BUT, they cannot enforce this Directive because the company is no longer within EU jurisdiction.

So, they might take measures against the company.
Kitty Barnett touched upon the measures in question yesterday (I should point out that they were only ever tabled):

1. The withdrawing of Intellectual Property Protection.
2. Blocking companies from raising finances in the public markets where existing EU VAT debt is shown.

Tit-for-tat trade war anyone?

I think one would be very likely to break-out if the EU took such action.

Linden Lab leaving the EU for such a reason could very well draw massive attention to the Directive they're trying to escape, and voters (who generally aren't exposed to the directive) would begin to question why policies not even set by our own government in London are chasing international investment away from our shores.

But hey, I'm getting ahead of myself .. and in cloud cuckoo land probably.

Oops, sorry!

Okay, I guess they've been evading VAT till 2 months ago... not the sort of behavior I'd hoped for from LL, but well... it's LL. Heh. Amazon tacks your VAT onto the bill where you can see it, I think they always have done.

Anyway, it looks like we're not really in so much disagreement after all. LL should have spoken up sooner.

Yes, LL has no excuse for not having raised this sooner. Really bad show and appears to be illegal as well.

As for Amazon -- hehe, now *that's* a much better run company than LL! Amazon really understands e-commerce, whereas LL is a bunch of engineers.