Vat

From Norwegian company Funcom (Anarchy Online, Age of Conan) page: (which is also company outside EU)

VAT Regulations

As of 1. July 2003, EU regulations require us to apply VAT to all purchases made from EU countries. Funcom's subsidiary in Luxembourg collects EU subscription revenues at a flat 15% VAT (lowest VAT rate within the EU).

To avoid adding the VAT Funcom is required to prove a customer is not subject to the EU VAT. The issuing country of your payment instrument will be used to check this. To correct a misplaced VAT, please fax a copy of your own or your legal guardian's photo ID, a signed copy of a postmarked envelope addressed to you and your Game login name to +41 442018321.

So how its possible that one company charges VAT based on its subsidiary in Luxemburg rate and other company Linden Labs who has subsidiary in England charges VAT according to resident country and not by UK VAT tax which is 17,5%

Because they process all the credit cards and payments in this country, wich means they have to abide by british law

From Norwegian company Funcom (Anarchy Online, Age of Conan) page: (which is also company outside EU)

VAT Regulations

As of 1. July 2003, EU regulations require us to apply VAT to all purchases made from EU countries. Funcom's subsidiary in Luxembourg collects EU subscription revenues at a flat 15% VAT (lowest VAT rate within the EU).

To avoid adding the VAT Funcom is required to prove a customer is not subject to the EU VAT. The issuing country of your payment instrument will be used to check this. To correct a misplaced VAT, please fax a copy of your own or your legal guardian's photo ID, a signed copy of a postmarked envelope addressed to you and your Game login name to +41 442018321.

So how its possible that one company charges VAT based on its subsidiary in Luxemburg rate and other company Linden Labs who has subsidiary in England charges VAT according to resident country and not by UK VAT tax which is 17,5%

Quite simple, Funcom's Billing is actually based in Luxembourg therefore they have to apply the rules from Luxembourg, thats why they only charge 15%. For users outside of the EU who use their service would not be charged VAT as long as they supplied the necessary documentation. All uses within the EU would be charged 15%, no avoiding that unless you're registered in your EU Country for VAT.

LL is based in the US, they are Billing from the US, they are applying VAT as per The Rules of Brussels, read the Blog and links, it is quite clearly laid out in Black and White.

Totally 2 different examples.

And LL's office in the UK has absolutely jack S..t to do with the VAT.

I am a European, I have to pay more for Land Tier and I did not moan and never complained, I had to accept it. These are the rules imposed by the EU of which the country I reside is part of. There is nothing we can do or say and again has nothing to do with LL, it is the law of Europe.

My suggestion is that people should stop trying to compare LL or other internet based companies over the VAT issue and get on with SL and stop posting threads about VAT, if you want to moan about VAT take it up with your local MEP not in Resident Answers.

Put up or shut up, this is getting so frigging boring and mundane to say the least.

Regarding VAT and Europeans being hard-done by compared to Americans, we must remember that the Dollar has lost value against the Euro and the Pound, which partly mitigates the effects of VAT.

LL is based in the US, they are Billing from the US, they are applying VAT as per The Rules of Brussels, read the Blog and links, it is quite clearly laid out in Black and White.

And LL's office in the UK has absolutely jack S..t to do with the VAT.

Regarding VAT and Europeans being hard-done by compared to Americans, we must remember that the Dollar has lost value against the Euro and the Pound, which partly mitigates the effects of VAT.

Put up or shut up, this is getting so frigging boring and mundane to say the least.

LL is based in the US, they are Billing from the US

What Linden Labs could do is arrange EU members charging through United Kingdom. That way all europeans would at least have same VAT or even arrange it to Luxemburg which has one of the lowest VAT 15%

(Punctuation is my own guess obviously, based on my tone)

Q: Can I ask whether LL have voluntarily decided to follow EU rules, or did the EU approach LL?
A: We're trying to be proactive here: we have not been contacted by any authorities on this subject, but we did recognize - while completing our own audit - that this is a liability that was growing, much more rapidly than we expected it to.

In the same way we weren't contacted by anybody to shut down gambling, we weren't contacted by anybody to comply with VAT.

Q: Why haven't you created a general tax like iTunes? No matter what country you come fom, it is the same taxes, no VAT.
A: I wasn't aware of that. I don't know how they handle that because in the US - when we charge a sales tax - we have to charge it wherever the local jurisdiction is (when I say we, I mean "us" in general because Linden Lab isn't obligated [Comment: guess on the word "obligated", the actual word was garbled and I could only understand the -iated] to charge local sales taxes in the US).

What iTunes may be doing, what you may be referring to, is we've subscribed to what's called the "special scheme" under VAT rules. Under the special scheme we don't have a EU company, we've just registered with one country to pay VAT and so the special scheme makes it easy because then we just collect and remit to the one country who then redistributes it to all the other EU countries and with the special scheme we charge at the rate of the country of residence of the end-user.

What iTunes may be doing is that Apple may have an entity in for example Luxembourg and then in Luxembourg they charge at a 15% rate regardless of where you all live in the EU. That could be what you're referencing, and for now, because we don't have an entity in Europe, we're using the special scheme and because we're using the special scheme we basically pay the VAT that's required by where you live.

I hope we can get to that point too, because Luxembourg has a much lower tax than other countries, for example.

Regarding VAT and Europeans being hard-done by compared to Americans, we must remember that the Dollar has lost value against the Euro and the Pound, which partly mitigates the effects of VAT.