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

Nice summary. Good post.

No, because the vast majority of such services that Europeans consume have never performed such a price increase.

Moreover, _none_ of them have ever rendered Europeans inferior as a result - something that's contrary to the very spirit of the idea of a virtual world.

Already, people in world have basically said that this change is tantamount to saying that Europeans are unwelcome to directly own land in SL.

As I've mentioned elsewhere, it may also have a domino effect - because when Europeans _do_ switch to US private landlords to avoid paying VAT, the most likely result will be an EU tax investigation of SL, which could end in any number of nightmare scenarios. How about every SL landlord having to be considered an LL employee?

I think there are two points we can all agree on (well almost all )

i) LL should not have implemented the new charges without notice

ii) although LL is not responsible for having to charge VAT, nor obligued to offer EU customers a discount to level the playing field - the introduction of higher charges for EU customers will have a negative impact on the inworld economy which will affect everyone (we may differ on the exact nature, size and duration of this).

Matthew

SL landlords won't be considered LL employees under US law. Not a hell of a lot the EU can do to change that. Like I said in another post, the EU can kiss my ass if they expect me to start remitting them one damn cent.

It's sad that you have this attitude Chris. You give the rest of us Americans a black eye with your "we are the greatest and the rest of you suck" attitude. I have a number of European friends in SL and I cherrish the time I get to spend with them. I value the freedom of America (well we lost some of that since GWB went on his Patriot Act crusade), I value the low(er) taxes and free markets of America. But quite frankly there are a lot of Americans in this country who really need to smarten up and realize that we too have some serious issues going wrong in this country. We are NOT all that.

Back on topic ...

This VAT sucks there is no doubt about it (the worst part being that the Lindens never commincated anything to anyone ahead of time). But it negatively effects each and everyone of us in SL even if we are not part of the EU.

You're not rendered inferior -- you simply are paying more because the government taxes you a lot. To reduce the amount received by LL from Europeans (ie, by having LL receive only the "net" amount from you all, whilst receiving the "gross" amount from the rest of us) because of EU taxes would penalize everyone who doesn't live in Europe because we would be, in effect, subsidizing your participation in SL -- and that simply because you live in a place where the government has high taxes.

EDIT: Just of of curiosity, I've researched what Blizzard charges in the UK for WoW. Apparently it is GBP 9, inclusive of VAT. Per my calculations, this works out to being very close to the USD rate of USD 15 plus the applicable VAT of 17.5%. In other words, Blizzard still gets its USD 15 (subject to exchange rate fluctuations of course), but simply adds on top of it the VAT and comes up with a "inclusive of VAT" price. Blizzard doesn't appear to be discounting Europeans because of VAT.

I agree, but having non-Europeans subsidize Europeans by having us pay more to LL would be grossly unfair.

this is the nature of tax though. people without children subsidise families, high earners subsidise low earners, singles subsidise marrieds, workers subsidise dole recipients, and so on.

/me sighs.

That can be the justification, shaky as it is in my opinion, for taxation regimes in one country. It has no bearing at all on whether Europeans should pay *less* to LL, in effect, than everyone else.

There simply is no justification for non-Europeans subsidizing Europeans here so that they can get SL for contributing less to LL, whilst being the sole recipients of the "benefits" of the taxes paid into Europe's coffers which are making it more expensive for Europeans to begin with.

At the end of the day, this is all an academic discussion. LL is simply going to create higher "inclusive" prices for Europeans by adding the VAT to what they charge everyone else, and calling that an "inclusive of VAT" price. Blizzard does the same thing, as far as I can tell.

You must be a USA citizen to make such a stupid remark as "pricing is the same globally". It isn't! In europe VAT is included in the price of every product you buy if it's not it should be mentioned how much tax will be charged. This is globally known by every company. You can't sell products in the EU without mentioning extra costs like VAT.

Even I know that in the US a price is mentioned without VAT so why don't you know that in the EU every price is tax included? Is it your education or is it your imperialistic view on the world?

All I am saying is that here in the US we do not view "tax" as being a part of the "price". I am well aware that this is not how it works in Europe, I have lived in Europe myself for many years. However, undoubtedly when LL set what it considers to be the "pricing" for various things in SL, it set the rates as they are globally -- completely in ignorance of practice in certain markets outside the US relating to pricing being inclusive of VAT. It's a case of ignorance, without doubt, on the part of LL -- they are engineers, not experts in international business in the least.

But thanks for your personal insults, they are most welcome, you simpleminded jackass. Clearly they reflect a meager mind, sad to say, as they always do when they creep into debate.

So in the US it's normal that you can start a business without actually knowing what to do?
I don't dig this, if this was a bunch of engineers all together second life would be free, would have no currency and they wouldn't sell land. So excuse me if I find this very hard to belief that it's due to only being engineers because if they are all engineers why don't they just fix the grid instead? There is much work on that so what they show to us is that they don't have any engineers just a few accountants.

Exactly.

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It`s the way LL has handled it, or in this case, did nothing, that is upsetting to people. Very upsetting. Even to me, who is a resident of the US. If you read some of Robin`s statements she mentions they(LL) have been "absorbing" this tax. Then, she busted out a lie (basically) saying you can not warn people they have to pay tax. BULL SHT! They have been paying it, they could have warned then. Alternatively, they could have warned NOW then brought it into effect in a month or two, giving its users time to decide what to do with their land.

This is pretty much exactly what happened a few months back when they decided to raise our tier fee overnight. Remember that? After the huge outcry they eded up retracting that for a later time, but suffice it to say - they still have not learned their lesson. They still choose not to deal with customers correctly, I can not help but think they feel we are a bunch of children. We are adults, and should be treated as people who can understand and think for themselves, not a bunch of sheep. Maybe it`s because we are all still here after the mistreatment, so there`s no reason for them to shape up. But that`s dangerous, just wait til there are other pastures for us to roam *Rolls eyes*

I'm curious to how that actually works in practice. When you buy something labeled as, say, $5, are you expected to do the tax math in your head (ie $5.8 or what? I like to have my money ready before I get to the checkout, it keeps things moving for everybody else.

Just like free players being subsidised by premium account holders and landowners is unfair? (Disclaimer: I'm referring to those who don't buy anything at all; period. Not even on the Lindex.) At least the subsidised Europeans would be paying _something_.

Anyway, if the bottom falls out of the European premium account/mainland market as a result of the VAT issue, Linden Lab will be forced to make the platform attractive to them again. One of two things could happen in my opinion.

1) Pricing on everything is revised upwards slightly and EU players are subsidised by stealth. Ie. Everybody pays the same price and EU players are told VAT is included in that price.

2) New prices are set in three currencies:

$US dollars.
£UK pounds.
€EU dollars.

UK & EU prices include VAT and are the currency only options available to British and European users.

This is basically how WoW works, and their UKP/EUD prices *are* approx. 18% higher than the $USD price.

The logic behind this is: The two-tier price structure makes the price difference, and thus the European disadvantage, less obvious to European users.

k then. Tear me apart.

Yeah, if youre paying in cash you can pretty much estimate it easily. If something is marked $10.49, bring $12 up.

When you go to checkout they tell you the total with tax. Many people do not pay with cash, they pay with card, so it`s just walk through, swipe, grab your stuff, and leave.

in the states? when i was in washington (the state) yes you had to mentally calculate tax. however over the bridge in oregon the tax was actually taken out of your paycheck instead.

lol@ 17.5% Moore

Right. Which is what I understand Blizzard does. I think that would be much more likely than any scenario where LL decides to take *less* from Europeans.

Which means that we are rendered inferior - amongst other things, it means that no European can ever compete in the land business.

I mean, imagine if the shoe was on the other foot - if you had spend possibly months or years building up a business in-world, only to be told that it would have permanently higher costs than other businesses just because you are American, wouldn't that upset you (no matter _why_ it was)?



There is a huge amount of cross-resident subsidy in SL anyway, though.

And regardless, there are other ways:

- Accept tier in L$ for sale via Currency Linden (LL have said before that this would be possible, and now they have a pressing reason to)
- Implement an alternate tier scheme for Europeans that grants different amounts of land at each tier



People in World of Warcraft don't expect to be able to defray their subscription costs via play. People in Second Life do expect that when they do business.

You make more sense than most in these VAT discussions Victorria. Just let guff like that pass you by.

Yes you get used to it. You expect it to be 5% or so more than the price you see on the ticket. If you happen to be on vacation or other travel to a higher tax state than you are used to (say California), then you may be somewhat surprised at the till. But you just expect it will be around 5% more than the listed price. I dont think too many people do the math in their heads in advance.

Huh? Oregon doesnt have a sales tax, I thought.

The "why" matters, though. In this case it is something external to SL. No way should you be given breaks within SL for what your government imposes on LL outside of SL.

hehe. I'd have probably started going all passive/aggressive and/or shouting at people block caps if I didn't try to extract some humour from this whole VAT mess.

Well, judging by the way some are reacting to it anyways.