Reselling Tier?

More like impossible since LL doesn't provide the tools to make that work .

I was only basing on Walker's train of thought, it's just speculation until LL actually clears the LindeX issue up .

For the rest:
If you rent and pay "tier" in L$ then nothing changes.
If you own and pay tier to LL (from CC or by selling L$ you earned in-world) then you will get hit with the surcharge .

Not at all. Besides which, I don't think they would guilty of tax evasion, but it's arguable that they're complicit if their entire business model is based around selling a very specific product designed to help people avoid paying tax.

I agree that this whole mess is full of grey areas, so we should tread very carefully - particularly when coming up with schemes designed to help out Europeans (of which I am one). I don't want to find myself in trouble with H.M. Customs & Excise if I start buying tier from a non-EU citizen (whether or not they're selling it specifically to help people evade VAT) instead of Linden Lab, so I think it's a good discussion to have.

As for the "no VAT on Lindex transactions" situation, I was under the impression that the Lindens _do_ profit from those transactions in the form of commission, and any $L sales between EU based buyers and sellers should attract VAT.

Consider what Ebay does with its EU buyers and sellers:

http://pages.ebay.co.uk/vat-landing/faq/

For every completed transaction LL gets a flat 30 cent from the buyer and 3.5% from the seller.

If LL increases those fees as well, it would probably not be quite as bad as the tier increase: 30 cent becomes +/-36 cent and 3.5% becomes +/-4.2%.

(That still doesn't really answer the question on whether VAT is owed on the larger amount that the buyer is buying though?)

LL also sells L$ directly on the LindeX through Supply Linden.

as a quote from ebay

From 1 July 2003, all fees displayed on the website will be gross fees, i.e. VAT will be included. Only in your account pages will you also see the applicable net fees.

see where the lindens went wrong..what they are doing is illegal. It is the law and it is always assumed fees are VAT included.

Sticking to the topic of the thread.

How can an in world transaction be considered as Tax Evasion?

When LL as a supplier of electronic services under certain rules must charge VAT, that we know now as a fact.

An in world transaction by an individual is not supplying electronic services and therefore would not be subject to VAT as he/she is the end user.

Given LL's disregard for what actually happens between residents and transactions made in world, they quote in most cases on the knowledge base.

"Linden Lab cannot verify, enforce, certify, examine, uphold, or adjudicate any oath, contract, deal, bargain, or agreement made by the Residents of Second Life.

So, if one resident buys tier regardless of location and sells that tier on in world as a form of donation to a group will the quote above remain or will it be considered as tax avoidance.

Is this tax avoidance given the fact that down the line someone has to pay Linden the tier in the first place to donate.

It could also be argued that Owners of existing groups that have donations from all members are also avoiding paying tax if they originate in an EU country.

If LL decide to review this then we could possibly see a complete overall to groups and the 512sqm bonus land which is free.

So, to follow the money, if a EU player buys L$ on the Linden Exchange, VAT is not (or is it?) applied, because it is an inworld transaction. According to the website, buying L$ on the Lindex is not listed as one of the transactions where VAT is applied. Even if VAT is applied, then VAT should not be charged by somebody selling tier to them in L$ (or maybe even $) because VAT has already been paid.

And, apparently people already resell tier as a previous posts shows, so to me, I don't see a problem with it.

It can be even more complicated if I resell my tier to Elanthius and he in turn resells it to a EU player! It is all inworld transactions and really should not involve VAT at all.

Reselling tier may be the next hot thing, but it is no business interest of mine. I only want to make small money off the 22K sqm I have in extra land available - it is my reserve sqm just in case land comes up I like to buy.

I don't think there is a big difference between reselling tier and renting land either.

Be careful with the wording there though: just because LL doesn't apply VAT doesn't mean it isn't owed for some kinds of transaction.

LL will just take the stance that it's not responsible for transactions residents make among themselves. It's up to anyone who runs in business in SL to determine whether they should be charging VAT or not.