How will European Estate owners compete now?

yup yup - thanks Meade - I was not trying to imply that was a SL link - it is just a sales tax link.

ultimately - if California has a 9 per cent sales tax in place now, then surely that needs to be deducted for Europeans (and eveyone else outside of california) and then local VAT applied afterwards. LOL - I guess LL will be employing some more people to sort this out mess out.....

Hey, Oryx and I somehow became interchangeable.

Mmmmmmmmm. Only in my dreams.

I wonder as VAT is now having to be paid by Europeans... if they can also claim their tax expenses. If they have a store on their island.. there are expenses with that... a really good and methodical breakdown will have to be kept at the end of the tax year.. whack it in and get your rebate... its not so bad!

Oh and everyone ( not me obviously) is heading over to the states to shop... because the dollar is so weak against the pound right now... so in essence all this time Brits have had an advantage over our American friends.. as in "real money" for us.... it worked out on the scale of things to be quite cheap..and you saw no notable difference then against yourselves as the "under dogs" did you?

In holland (and a lot of european countries) there are 2 levels of VAT, one for essential goods and one for non-essentials. VAT percentages and what falls under what category differs widely from country to country:

http://en.wikipedia.org/wiki/Value_added_tax

And I'm confused too. I have an official business, and most of my LL transactions I put under this business account.

As LL was a non-eu company, this meant, i didn't have to add VAT to my 'bills' to LL. Doing business with non-eu companies is done through a nil-VAT tax ruling.

Now that LL is apparantly an EU based company (billing wise). I'm OBLIGATED to both pay VAT and REQUEST VAT (and put it on my quarterly tax forms...), from transactions i do with LL.

Although it's nice they offer me tax exemption through my legally registered VAT-ID (although i think this doesn't even apply according to tax rules, LL still needs to ask VAT from other client companies, these companies just have to charge them back from their clients again.)

My company now has to now officially request vat over any transaction where my company is on the receiving end... no clue how to do that, with microtransactions.
Although I officially need add this VAT on any transaction I now do with every eu sl resident...
I normally consider any transactions within SL is 'non-existent' tax wise though, and my main client is LL. I offer a service to THEM, and they sell this service in the form of selling L$ to residents (and offereing premium accounts etc.)

This also means i now officially have to ask for VAT from LL on every transaction (money transfer I do with LL).
It can't be the case that they tax the EU citizen with VAT, and not pay that VAT through to their deliverers. (The people providing the L$ and LL value)
If they only ask for VAT from EU residents on their sales and not pay this through on L$ sales, they break the VAT chain.

This is going to be a terrible administrative mess for me...got to get myself a tax consultant again.

Yes I got a pair of Levi's in New York for seventeen quid. Add the cost of the flight onto that and the hotel and it only cost me around 517 quid for that pair of jeans

Yes the pound is good against the dollar but that doesn't give us an advantage in SL, we still have to raise the amount of money in dollars. We have more income to spend on LL, such as land is cheaper in real terms but it doesn't give us an advantage inworld because 195 US Dollars is still 195 US dollars, well it was until they added VAT to it

I, of course, did. LOL
The US has become the wal-mart of the world. When all the europeans come on their government mandated paid vacations from their government mandated window-offices and buy tons of clothes and jewelry while so many americans have to scrimp together the money for one pair of jeans--you can't help but notice the inequality.

In a global community like SL, it's pretty obnoxious to complain about the unfairness of paying an extra 17.5% when, by comparison, US residents are paying 100% more than UK residents for the same services (i.e. hosting of private islands on LL servers.

£517 for a holiday to New York... Not bad!

I just cant believe they have not notified people... that is BAD

It's good value if you go in March, even if the St Patrick's day parade is on and Manhattan is busy.

Well, people with Grandfathered Islands at the old tier have had a 33% advantage over regular estate owners for some time now, and yet, we survive. I'm sure our European residents will manage.

When I recently bought land I had to make calculations to see if I could afford the tier. I could, by a narrow margin. If LL had warned us about introducing VAT I would have added that to my calculations of course. But they didn't, so now I'm stuck with land I can't really afford. (Most of my land is used for non commercial projects, btw)
I can't start to tell you how much that sucks. In real life I would just add the extra percentage to the price of my merchandise, as every business in Europe does. But to do that in SL seems unfair to my customers. Besides, charging more for my items will probably mean I sell less anyway.
So, thanks LL, for implementing the VAT charge in this inconsiderate way. You just spoiled at least 17,5% of the fun I had in SL.

What I make in SL is just enough to make the game pay for itself, and I also don't see how I have an advantage over americans because of the weak dollar. For one, as far as I can tell the US is still ahead in purchasing power, and besides I pay in (linden) dollars, get paid in (linden) dollars. I can buy the same stuff in SL you can, for the same amount of money you pay.

(You should maybe ask yourself why the dollar is that low and next time vote for someone who has more than one braincell to share with his family. But that's another topic.)

Oh gosh! I do that a lot in RL. I'm terrible with names, but I think that's the first time it happened in a forum.

Sorry ladies.

That's okay. Ann's nicer than me anyway. I should be flattered.

from L$81216,45 to L$96647,5755 to break even, $56usd increase, do the math

Germany has a two-tiered system as well, we have 19%VAT and reduced rates for SOME, but not all essential goods. For example, we DO have VAT on books, but it's a reduced rate.

So yes, there's VAT on everything! And it does apply to foodstuffs, too, just with a reduced rate.


And boy was I angry when I noticed that they had introduced this without telling on the blog. It might be only 2.85 bucks in my case, but I still think it's a daft idea.

Well, it could be that tier will increase 17.5% for everyone who *doesn't* have to pay VAT. Maybe that will be our Christmas surprise!

That would take care of the price advantage all right.

I must say, this is a pretty sharp sting - I really haven't got my head around this quite yet, but I certainly feel for Euro folks who had this sprung upon them suddenly.

Ouch.

Oh,and I just got an Email by LL explaining about the VAT thing. NOW. Talk about barn doors and horses.

it says

My respect fo LL as a Business entity grows lesser every time they pull something like this.

It seems to me more a reflection that they didnt have their act together beforehand. These should be subject to VAT as LL has a business presence in Europe. So it's a compliance issue it seems to me, but it reflects LL didnt have their compliance act together to date. Not that this is a big surprise, but ....

Exactly. The gambling ban was a compliance issue. They bungled that. Ageplay was a compliance issue. That wasn't exactly smooth sailing. Verification is a compliance isuue...it doesn't take much to say.."OK. We have to change the rules. Let's tell them and then we can change them next week". Beyond business, it's just courtesy, especially after that Building Trust Bullshit.

Yes I think so. I suspect there is a compliance push going on now. Why? Legal threats in part maybe? Preparing to sell maybe? Hard to tell.

all they have to do is get a VAT id if they are a business.

of course, when I went to put in my VAT id, it didn't farking *work*

good thing I don't own mainland

Just got to put my two cents in (jeez, I hope I'm not going to be charged VAT on that too!)

As one of those poor Europeans, this is just bloody awful! I was paying 25US$ a month on tier, and I just recently sold all my land, except for 512sqm.....boy am I glad I sold it before all this happened. But I really really feel for others who have vast amounts of land that they're going to be charged for....and of course all residents who are in SL with a particular budget in mind....(me included). It just doesn't seem like fairplay to me.

I'm in the music business, and if I said to someone that I'd do a gig for a certain amount of money, and we signed contracts, I could only imagine how irate he'd be if I turned up for the gig, a hour beforehand and told him that the fee was going to be more than we'd agreed.

I understand that laws have to be obeyed etc etc, but there are activities that go on in SL that are quite illegal in Ireland and I'm sure other countries, so why did they just ban gambling? I really don't understand it at all!

New Set of Rules for SL:

1. Taxes will be applied to all residents who wear skirts that rise more than 3 inches above the knees....12.5 percent per half inch.

2. All HUD wearers will now be required to purchase a license.

3. There will be a new Poofer tax of 20%.

4. Butterfly emitters will now be taxed according to the number of butterflies that are emitted.

5. If you have a television on your premises, you will be required to purchase a license (I actually have to do this in RL)

6. All drinking establishments will now have to close at 11.30pm.

7. There will be a strict curfew for all residents.....no leaving your homes after 12 midnight. Anyone caught outdoors will be immediately imprisioned and fined, and a VAT charge will also be applied to your fine.

AAAAGGGGGGGHHHHHHH

And it would take care of me paying these guys for virtually nothing. If that happens, I will be going from a sim's worth of tier to $0.