How will European Estate owners compete now?

Do US people pay tax for their Lindens and Land?

I live in NZ so I don't think I'm paying tax but I don't think I have to either as I don't have to pay sales tax on anything I import from America unless I plan to resell it.

Hmmm, wonder how that works for selling Land in SL etc. Don't think my countries tax collector will think about invading SL for a little while yet.

Is VAT the same concept as the GST (the 12.5% goods and services tax) I pay in NZ?

It's web space, hon. You're not reselling web space. I think you're safe.

I guess I'm one of the few who feel that directing anger at LL instead of the government that imposes such insane levels of taxation is rather nonsensical.

no but this BS will be charged down the chain so eventually every one will pay our VAT or abandon their land and move to an outside of the eu landlord

edit: i`ve allready raised my prices by 19% as that`s what LL will be charging me, sent a notecard to each resident like 1.5h hour ago

Yes, I would say "Don't shoot the messenger" but there was no messenger and no warning. Hence the anger from this American. I will probably benefit from this in the short term, but I'd rather have myself competing against other sim renters in a fair environment, not one where I have a 17.5% advantage.

I was just about to get myself an estate .. i already disliked the ridiulous tier of 295 USD a month.. but due to the VAT its an even more ridiculous 346 USD a month..

a 50 USD increase in monthly fee is huge.. and should have been announced weeks ago.. im lucky i didnt buy a sim last month and got stuck with the monthly bill. For the people who did buy an estate not too long ago.. i feel for you.

Agreed. At the very least they should have openly announced this, enough in advance that people would have a chance to tier down to their desired budget.

Some people keep tight budgets and can get in trouble when a bill unexpectedly jumps. It's really poor customer relations not to give fair warning.

I expect we'll see even more people head to the private island rentals and/or give up being premium over this, mostly because of the sudden shock.

Have now got the email. What a crock of crap.

I'm a UK citizen paying taxes to a US company? Why?

Both EA and Blizzard, who I also pay as US based companies and a UK player, haven't mentioned anything about taxes - both are far bigger and more together than Linden Lab, and you'd have expected them to have made some kind of announcement first.

My $80 of SL has now jumped to about $95 a month.

Benefit/advantage to me? Nothing.

I'm not paying for a UK service - I'm paying for an INTERNET service, on an international service.

I'm sure that when US players start getting taxed their state sales tax included there'll be an uproar.

Born free... taxed to death.

Broccoli

In the real world it pays for things like healthcare, education, etc. The hilarious thing is that avatars don't need any of the stuff taxation pays for.

That and the fact that an EU citizen pays EU taxation, currency conversion charges when billed for that EU taxation, and can't run a casino because those are illegal in a non-EU country.

I wonder if this is the start of a move to everyone paying tax at local rates?

Wow, this sucks, I along with many others are getting stung for this VAT exercise.

But why 17.5%, lucky I suppose it could of been 19% as in what I pay in Germany, so that gives me a 2% advantage. Not!

Now that this has happened, why can we not then purchase L$ in our own currency?
In addition to the VAT we have to pay currency charges as well.

So, as someone already mentioned the US has a 17.5% advantage over Europeans, prior to this VAT being added the US residents had approximately 1.75%-3% advantage as currency charges were not incurred. So now in actual fact, US residents have a 19-20 percent advantage over Europeans.

Edit: After checking my Account page, I am charged 19% which is in accordance with Germany VAT/MwSt regulations not the UK's 17.5% VAT.

It seems that VAT is applied according to the Country one resides in and that Countries VAT regualtions..

I SEE THEY TOLD YOU ALL ONLY A COUPLE OF DAYS OR SO BEFORE THE NEXT PAYMENTS ARE DUE HOW CONVENIENT..


It's disgraceful ad shameful that Linden Labs are finally getting so corporate nervous that they are allowing harsh real life taxes to be levied on virtual world inhabitants as a resuly of our virtual existence. And to levy this on one or few nations only is intolerable for those people.

This will kill their business in the EU. What is next? Income tax on L$, 1st world laws and prejudices and regulaitons are already being brought intoSL all the time now the concept is becoming less and less visionary and more and more a cold business model.

The BRAVE NEW WORLD HAS BECOME A BIG NEW SHOP.

http://us.blizzard.com/support/article.xml?articleId=20504&searchQuery=subscription%20tax&pageNumber=1

Don't worry. It's coming and not just over in the EU.

... will now creep in anyway. Everybody in the EU will have to raise is prices by some amount just to stay above the water cost-wise. So it'll be the end customer who will foot the bill to some degree.

However, in reality it'll mean less EU based SL businesses, of course, because many of them would be priced out of the market due to the 17-25% cost disadvantage compared to their peers based elsewhere.

/me shudders at the thought what this will do to land prices during the next few days.

The land market impact will be felt fully a month from now once everyone's tier date has flipped. It will be a slow and steady descent to $L4.5 a meter.

I suggest everybody untick 'Land for Sale' on the map to prevent Corsica and Nautilus disappearing beneath a giant yellow square.

This is not an apology for Linden Lab, but just a point to bear in mind.

I buy a lot of software on-line.

Some of it from companies who have NO presence in the EU, and some of THOSE companies have voluntarily accepted a request from the UK Tax Authorities to charge VAT on sales and pass that back to the UK government. Fair or what?

As a very new island owner, who was just covering monthly tier charges I'm now very disappointed and realise that this puts anyone in the EU at a tremendous disadvantage over other land owners.

How can we compete? The simple answer is we can't.

just checked my account italians have to pay +20% vat

Hope to sell all my land soon

I foresee some people selling their land and going back to basic. Less money for LL.

Thanks Alyx, i was wondering about Premium... the 'My Account' link says 'Premium Registrations' whereas your email quoted here says 'Prremium subscription fees'

Mine are due November .. i wonder when i will get my email?

Imogen

There's something about LL's wording that implies to me that they are holding back on more up-front bad news for non-Vat EU traders.
The "this includes" list below does not specify the very obvious LindeX purchases, giving the impression that such will not be subject to VAT.
The reality is in the "Anything that you pay Linden Lab for".

The only transactions not subject to vat are the purely in-world L$ ones.

It could also mean that the charges on cashing out L$ for US$ and for Credit processing should be subject to VAT.
VAT on L$ to US$ conversion would bite anyone who was cashing in order to have as US$ balance to pay LL charges. They would be paying VAT using money that had already been subjected to VAT.
edit: OK. Any VAT could only be on the commission charge, and not on the amount being cashed.



http://secondlife.com/corporate/vat.php
]]]]]]]]]]]
What are the items for which Linden Lab charges VAT?

Anything that you pay Linden Lab for will have VAT applied. This includes:
* Premium account registration
* Purchases from the Land Store
* Land use fees (tier)
* Private Region fees
* Land auctions

What are the items for which Linden Lab doesn't charge VAT?
Transactions in L$ between individual Residents are not subject to VAT.
[[[[[[[[[[[[


Looking at how LL have worded it, two possibilities come to mind
1) LL being the usual inept
2) LL deliberately delaying some of the bad news - A "Rolling Outrage"