How will European Estate owners compete now?

With the unannounced policy change raising VAT paying residents tier costs 17.5%, European residents will now have to make 17.5% more in a world where tier was already eating most of their profits.

Overnight, US estate owners have a 17.5% advantage over Europeans. What will European estate owners do? Raise rent or absorb the hit to remain competitive?

And how about European Mainland owners who had just the exact amount of land tier they could afford in their budget? Will they keep their mainland or sell some to lower their tier that has just become 17.5% more expensive?

Regardless, this huge change to the SL economy came without warning and has yet to be announced. Shame on you, Linden Lab.

First I've heard.

What's your source?

Broccoli

https://secure-web1.secondlife.com/corporate/vat.php

Rediculous that you have to read it here, AFTER the policy change has been made.

Check your account page Broccoli. No announcement, it's on the account page though.

Well I was running my island at a loss and didn't mind doing that because I pay for other online services. My other business interests were mostly covering the shortfall anyway but this is a big whammy for me, I'm something like USD$80 a month worse off now.

This sounds more like a complaint you should make to your EU governors--isn't it? Tell them to stay out of your second life!

My complaint is that there was no annoucnement. The billing page changed today. I have no issue with paying my taxes but when you believe you're paying them and then find out you're not, someone should tell you.

Also to LL, you're supposed to state whether a fee does not include VAT in Europe. This is common practice, if there's no statement that VAT isn't included in a price people will rightly assume that it is.

ROFL!!!

If your SL transactions are significant, and you are not a VAT-registered business, then 'make it so'.

There is no Second Life. There is only life.

I'd hate to be a communications guy at LL. Imagine how confusing that would be for the rest of the world? Maybe if there were dynamic messages for EU IP addresses that would work. For me, a US resident, it would confuse the hell out of me if they started talking about VAT payments.

Yes!
LL - where are my VAT invoices???? Online PDF will do nicely thank you.

If they can work out who they should slap the VAT on, then they have worked out who they should notify.

No. It's more about getting Linden Lab to stop processing payments in the EU and go back to the old way. It appears to us that we're being charged in USDs, and some of us are even paying currency conversion charges, so any reasonable person would expect that their payments were being processed in the USA. If that's the case, our payments are not subject to VAT at all.

But that's not the case at all.

This is more about getting Linden Lab to think through the implications of decisions like accepting payments on other continents more than government decisions in the EU.

If this was an EU based company, the tax information would have been obvious from that start. Here we're discovering the dirty truth and it hasn't even been announced.

Oh you guys should just revolt. I think you should assume that if prices are advertised online and the whole world is charged the same, that your 17.5% tax is NOT included in that price. Just do what we did--tell your governers to shove their taxes!

Actually, we are expected to pay taxes on any money that we take out of SL. If the IRS found out we made some income from SL and did not report it, we could get fined or jailed for not reporting the income (if it were significant). So you are not really at a disadvantage from US land owners.

Give me a break. Their money is taken from them up front and it's 17.5%. Even if I disclose and pay full tax, I still have an almost 10% advantage on them now.
Plus I can pay my taxes whenever I want. I am not billed for them.

Doesn't that favor you? The US$ is weaker than your currency, isn't it? Isn't SL dirt cheap for you? I could never afford the tier on a private estate--nearly $300 US. That's the price of an iPhone!

Yeah and they have socialized medicine and lots of other nice perks that go along with their 17.5% tax.

Question about VAT: Does it apply to EVERYTHING? I know it doesn't apply to foodstuffs, but how about services, like haircuts, or dry cleaning? I mean, the TOS says that we pay for a "service" as opposed to a "product," right? I'm confused...

Yes, I'm sure that's what all the VAT paying SL residents are thinking about right now

Isn't this on the horizon for US residents as well?

http://www.ferndale-mi.com/Government/sl_sales.pdf

Oh dear.....

LOL
Maybe when their arm breaks from all the twisting their governments are doing, they'll appreciate the fact that they don't have to pay a dime to get it fixed-up.

Seriousely though: taxes aren't putting people at a disadvantage. They are part of life (that can't be avoided).

The VAT on a private estate would bring the total to $347 US. Do you realize the brittish currency is twice as strong??? That's like paying $174 for the same land!

Rofl Ray! Ann, it does apply to pretty much everything sold, but there are reduced rates for certain 'supplies'. Domestic fuel & power, installation of energy saving materials (loft insulation, solar panels, etc.), connection of certain utilities, property renovation/conversion, women's sanitary products and children's car seats are taxed at 5% (the only reduced rate).

I think we'd really have to get into a war of income tax, minimum wage, and like-for-like product price comparisons to appreciate just how badly a 17.5% sales tax hits us in the pocket compared to our American counterparts.

Just a note that the "SL" in that URL is State & Local, not Second Life...

Yes, but everyone has a budget and everyone was going along playing SL with certain fees in mind. These fees have gone up 17.5% for Europeans overnight. But I appreciate you trying to make them feel better with your interesting comparisons.

And it's slighty out of date......

Thanks Walker, I always wondered. That sucks...