Island buying & VAT

OK so when you buy an island from LL you pay VAT if your from Europe. However, if you buy an island privately, other than from LL, do you pay VAT, I'm assuming not, is that correct?

But then, is there something in LLs system that recognises you as a European player and they will then charge VAT on the monthly tier, or do you inadvertently get around this because you've bought direct from a private buyer?

You do not pay VAT if you give the money to the seller instead of LL. Any transfer fee charged by LL to you is subject to VAT. Also, you will be paying VAT on your tier. As you correctly surmise, LL is identifying you as an European player using your IP number.

You have to pay VAT on the Tier either way of chosen purchase. LL probably have records of your residency or can see that from CC /bank details. They will certainly ask you at some point if they don't know already.


You don't have to pay VAT on the sim purchase price between resident-to-resident transfer.

I would be the buyer, the seller pays transfer fees.

Thanks for confirming what I thought the situation is.

If you buy inworld then VAT isn't due. HMRC have told me that they don't consider transactions made entirely within a virtual world to be services that are liable for taxation and are therefore outside the remit of VAT.

If you're paying by paypal or a method that takes the transaction outside of Second Life then whether VAT is due depends upon whether the seller is trading at a level that means they should be charging VAT.



The only way around this would be if tier was paid inworld, alas it's not so you will have to pay VAT on tier.