Letter to the EU (Warning: VAT-related :-)

The key phrase is "in Europe". LL is not a European company. You know that you are dealing with a company that is not in Europe so why do you expect it to operate as if it were. LL is charging and remitting the VAT because they are receiving funds from countries that demand that they do if they wish to do business with them. The price listing that LL must follow is that wich follow US law. If you as a citizen and resident of an other country do business with a US company expect that things will be done in a US fashion.

I don't disagree that LL handled the whole thing poorly but be realistic, just because you weren't being charged for it before doesn't mean you weren't responsible for it. The law caught up with you and with LL and this is the consequence.

Oh behave lol so it's ok for LL to ignore European law when it suits them? Come on. They have an office here now anyway which I believe processes payments so I don't think they can do this half assed.



Well technically I'm not responsible for it, LL are. If the VAT man was a complete git he'd ask LL to remit the VAT from my previous payment at the rate I paid. The VAT man won't come knocking on my door. However I hardly think that's going to happen when LL are about to deliver him plenty of extra revenue, I'm sure the VAT man will turn a blind eye to past indiscretions.

However I agree with you that the law has caught up with us, I'm not disputing that and it's not LL who are to blame for the law.

I expect any company who wants to do business in Europe, to the extent of also dealing with VAT issues, to put the fact the prices are subject to it on the pricing pages so that we know how much it is going to cost before signing up, not when it's charged to the credit card. LL has an office in the UK, the office which deals with payments for all of SL, surely it's not asking too much? With a UK payment office, they are subject to UK pricing laws surely?

Sorry, VAT is the responsibility of the seller, not the buyer. The EU directive which has caught up with LL is that the *seller* of services to EU must pay VAT on any service sold to an EU resident or business.

Paying VAT is not the responsibility of the buyer - either within the EU or within the terms of the directive that LL is now trying to obey*

Under contract law when an amount is agreed at the beginning of a billing period but paid at the end (e.g. as applies to mainland tier charges), the amount collected at the end *must* be the same as the amount agreed at the beginning of that period. You *cannot* add additional charges onto that amount regardless of the reason. Any taxes due must come out of the amount agreed at the beginning of the billing period. If the seller agreed the wrong price, it is their fault, responsibility and problem not the buyer.

Matthew


* I'll give a RL example how the VAT responsibility is the seller not the buyer. If you are a service provider based in the UK you are *required* to register for VAT if your turnover is >£65000 per annum - by registering that means you can claim back VAT on your purchases, but must pay VAT on any services you sell.

However, if your turnaround is less that £65K you can register for VAT if you wish to, but you do not need to do so. If I were to buy a service from a provider who has not registered for VAT, no VAT is due on the transaction - and provided the provider's turnover is <65K this is perfectly legal.

i.e. when I buy a service whether VAT is applicable or not is dependent on the providers annual turnover, and when this is small enough entirely on the provider's decision whether to register for VAT or not!

A quick business lesson

EVERY tax paid by any business is passed along to the buyer. EVERY SINGLE TAX!!!

The VAT is a tax added to the price of goods and services. You are falling for the lies told you by your taxing authority that it is not you paying it but the seller. The reason they want it added in to the "final price" you are shown is so that they can continue the lie and hide the true taxes you are paying from you. Wake up and realize just how my are being ripped off and having the wopll pulled over your eyes. In the US the tax is added after the price so we see just how our government is taking money from our pockets.

I think you missed the point of the post you were replying to

No, I did not miss the point. No matter how you word it it is impossible to put a tax on selling something. You tax the purchase and therefor the purchaser. If I as a seller am forced to add a tax to the products I sell, I add that cost to the final sale price and I do not pay the tax, the purchaser does. No business can operate in any other fashion.

The fact that a seller passes on the 'cost' of the tax to the buyer is not relevant to the issue of who is responsible for that tax.

It is possible to put a tax on selling something. VAT is Value Added Tax, not US Sales Tax. The Value Added is the difference between the buying and selling price.

In Europe the purchaser is not the person responsible for whether the tax is paid, if the seller doesn't price high enough to make a profit after paying the VAT on it it's their problem. All prices shown here by law are not allowed to have hidden costs, it must be what you see is what you pay. Here, being the UK, is where the LL payment office resides so does fall under UK laws and would be liable to trading standards.

Of course the purchaser ultimately pays the tax, but they also pay the rent, heating, lighting, staffing costs, pens, staff Xmas dinner etc etc, but that isn't shown seperate either.

So really what LL should do is have seperate prices for Europeans and include enough extra cost to cover the VAT. And make it clear what the European price is.

Maybe even a Mirror UK site like many companies use.

I'm not falling for anything - I am under no illusion - I know that the prices I pay are higher price than would be the case if VAT did not exist, I am under no illusion that all the money I give the seller goes into the sellers pocket. We were talking about who is *responsible* for ensuring that the VAT goes to the taxman. That is the seller's responsibility.

The buyer agrees an amount with the seller. The buyer gives that amount to the seller. As regards the buyer, that is it! Determining if and how much VAT is applicable is the responsibility of the seller, making sure that goes to the tax man is a responsibility of the seller. ensuring that the amount handed over covers that VAT and leaves enough left over for him to make a living is the responsibility of the seller.

That is how VAT works - the EU directive imposes VAT on non-EU countries on those same terms. LL cannot pick and chose to implement half the directive (i.e. implement VAT on the same terms as US sales tax works). If it has to obey the EU directive it must do so entirely i.e. impose VAT in the manner in which VAT works.

Matthew

This is for your local MEP. They will write back and tell you to contact him or her. Not that they'll be able to do anything. Linden Lab have interpreted the law correctly (give or take a few minor points the Inland Revenue will forgive them for). The EU's VAT Directive is merely unfair to European users of innovative platforms that have little to no competition.

The best thing to do would be to work towards getting this Directive abolished. Easier said than done. I live in a country of 60 million people, within a continent containing around 730 million. I've read forum posts (not just here) from over a hundred people in my country alone who are outraged by what has happened.

Strangely I couldn't more than twenty to sign a bloody petition.

They should just charge the same price, but denominated in Euro, and say VAT included. They wouldn't know the difference and would be quite content. That should also cover the cost of currency conversion. They'd rather be snowed over and not know how much the VAT is, so what the hell, hey?

That's how WoW do it, that's how City of Heroes do it. The difference being that we can't play with the Americans.

Aw, but sometimes Euro's play with it better!

And by treating it as a sales tax, it is certainly ensuring that it complies with the law and takes care of its own interests. It does the calculation and passes the cost on to you. The only thing is now you can see exactly how much. It is functionally no different than a sales tax, though the implementation differs. Seeing the price rolled in or at the till makes no difference for practical purposes.