Reselling Tier?

This thought came to me today regarding the plight of VAT for EU customers...

What is to keep me from marketing and reselling extra tier at a cost that maybe is a small profit for me but a less cost to EU players?

In other words, if I had an extra 16,384 sqm tier (a $75 value), why not "rent" it to somebody in the EU for the same amount or a tad bit more?

It could be considered corrupt, but I currently pay for a full sim worth of tier but have not used it all. Actually, what is to prevent somebody not in the EU to "rent" their entire tier even if they own no land?

All to do is the EU customer makes a group, the non-EU customer arranges financial agreement, and a group is made and the non-EU customer tier is "donated" to the group!

It is serious question and worth some discussion!

Can you say "Tax Evasion"?

Of course I can in at least 2 languages!

But, if it is in Linden Dollars, then is it really tax evasion, legally?

IMHO..yes. Especially when the lindens are bought in open market as a service to the residents.

Thisis why they did not give us any warning of this - they can get a few bucks before everyone goes underground.

The Linden Dollar has no value - remember? How can you owe taxes on something that isn't really money?

If the linden dollar has no value, why are so many spending money on buying it? Technically, you wouldn't be taxed for the lindens, but the cash spent to buy them.

Yes I know, but the Lindens prefer to have it both ways. If they can use the 'no value' statement when it is in their best interest, they we should get that excuse.

So, what stays in SL remains in SL? Right? As long as I resell tier for linden dollars, it is not taxable.
That is my theory anyway, I do not say that I condone the method, but is is a feasible workaround for those EU members that want to avoid it.

Really, what is the difference between a land barren owning island and renting it out and me having extra tier and reselling it to anybody? If I pay for full sim (65535 sqm) and have extra sqm to squander, who is to say HOW I squander it?

So, if you are renting from a island owner is that tax evasion too? I don't think so. It would be no different then that.

How can you "rent" your tier? To make use of your tier, you have to donate it to a group that owns the land or own the land yourself. Either way, you'd essentially be renting the land like any other land baron... and taking on all the same hassles of dealing with tenants, as well.

It is no more complicated than the sim owner who rents parcels of their island.

1. I market my tier for sale (say, 8192 sqm.)
2. Somebody pays me for that tier
3. I join the group the purchaser wishes tier to be "donated" towards.
4. Buyer pays agreed upon price in Linden Dollars
5. I contribute tier to group.

If buyer defaults, I remove tier contribution from the group. Of course this would be honor based system towards the tier seller. And granted, the maximum group membership prevents abuse of this, but it is still a small time income theory and sooner or later, somebody will think of a more beneficial way to bypass this system.

To me, it is no difference between the island owner renting land and me (hypo theoretically) reselling excess tier. What is the difference between donating tier to Arbor Project and reselling it to someone else?

technically speaking, L$ are not currency, they are product, and not backed by any real reserve or even guaranteed in any actionable way.... but since you CAN tax products purchased :hrug::

I suppose you could argue since there are no real goods involved, that it's a service, and I would think that avoids VAT... but I dunno

hey if I could afford a sim on startup I would have no compunction about saving EU residents some cash and making a lil myselfsay 33% of the difference?

I still think believe any attempt to find a loophole around RL taxes will bite you on the rear eventually. If Benjamin Franklin were in-world, he'd tell you, "The only sure things in SL are lag and taxes."

^^ What that guy said.

Reselling tier to Europeans, knowing full well you're helping them evade VAT payments is likely against the law. The EU authorities are likely to look upon it as money laundering so don't be surprised if you get a hand shoved up your butt the next time you land at a European airport. (In fairness they might just be helping you retrieve your hair and shoes. )

Seriously, I doubt LL would be too happy about this. The risk detection system (ie. Risk API) is already mentioned on the corporate VAT page. If it comes to their attention that you're helping people evade VAT, don't be surprised if you account ends up flagged for review or suspended.

ive been thinking about this myself.
really couldnt care less what the euro/american taxmen think about this either, just for the record. im more interested in working through the numbers, mulling ideas, seeing what others think about this and so on.
one could even 'buy land for group' i suppose.

the thing that makes ll happiest is $$$$$$$$

If it is against the law, then not knowing that you're actually renting tier to a European doesn't make it any less against the law though.

If it is actually tax evasion then renting in general suddenly became a whole lot more complicated because it shouldn't matter whether I'm paying tier/rent to LL or to another resident, if I owe VAT on the service then it's owed and the burden falls on the provider, not on me as the consumer.

So any landlord - regardless of their own location - renting to EU citizens would be required to charge VAT on their rentals or otherwise they would be guilty of tax evasion according to your reasoning?

That seems like too big of a mess for anyone in SL to sort since we don't have any means to determine who lives where and the only solution I really see would be to apply VAT on L$ purchases which would likely lead to even more outrage and less EU spending.

I have been buying and selling tier for months. Not as a tax evasion scheme but because it is absolutely cheaper and smarter than paying through LL.

If you have excess tier I will pay L$0.15/sqm/week for it.
If you need tier I will charge L$0.25/sqm/week.

There are no limits to how much I can buy or supply. Contact me or Skye Whitcroft to set this up whenever you like.

I answered this one in another thread already:

If I rent tier from you I need Linden Dollars.

To buy those, I will need to use my credit card.

If I use my credit card, I have to pay VAT.

i.e. The idea will not work.

Nope, we paid the VAT when we bought the L$; no need to TAX us a second time, is there?

I don't think you will pay VAT on your Lindex purchases -- you are not buying from LL, they are acting as a broker. I think this is why Lindex is not listed as VATable on the information page.

L$ you buy come from another resident, they don't come from LL: if you buy $100 worth of LL, someone's balance increases by $96.2 and LL gets $3.8 for providing the service.

The $15-$25 you'd potentially owe in VAT doesn't appear anywhere in that transaction.

you dont have to use a cc, and you dont have to buy from lindex.

Well, then every merchant will have to charge VAT over every purchase made by a European in SL indeed. This will become a little complex...

What if I pay my tier with L$ I earned in SL from now on? Would that help?