Increase stipend for EU users?

Another thread suggested merchants give discounts to EU-paying users to offset VAT. This is unworkable for various reasons. But the Lindens could offset the tax by increasing the stipend given to VAT-payers.

Now this is an interesting idea. Economics isn't my thing, so I don't know of the impacts it would have on the Linden economy as a whole, and I'm not actually 100% behind the idea for a few reasons, but still.. I find it interesting..

I'd be quite happy about it and would see it as quite a good step into the right direction and a way to keep EU users from downgrading in bunches.

Sadly, I don't see LL minimizing their own profit by paying out of their own pockets. That's what brought us to the VAT situation after all.

In fairness to LL, why should they refund the VAT? It's not like they're keeping the VAT they claim, it gets paid to the UK HMRC. Refunding the VAT would leave them massively out of pocket.

I'm from the UK, btw.

yea, i`d like an L$4000 weekly stipend to compensate heh

I don't think it is LL's business to make any adjustments to account for RL taxes that apply by virtue of where you live. Anything of the sort is simply a subsidy to Europeans because they live in Europe. That's just not LL's business.

Id have preferred a few additional spines on the land tier scale...but the minute you suggest it some non VAT payers start shouting about subsidising EU vat payers. So whats the point....

Because according to Phil they've been paying it out of their own pockets so far and only now decided it would be a good time to let us pay their expenses without warning...?

It would open up a Pandora's Box in my opinion. What about those who aren't Premium, and aren't entitled to stipends? What about when the next group*Fillin the blank* gets hit with some sort of economic inconvenience? IS LL responsible for that as well? I would say that because they handled this so horribly that a 1 time appeasement of some sort wouldn't be a bad idea to those affected, but any type of Quasi Socialist leveling of the playing is not a good idea, in my opinion.

Not talking about the warning - there are enough other threads about that.

This is about refunding us in L$. Just because they paid it out of their own pockets while they set up the infrastructure to collect VAT selectively based on the residents country, does that mean they should refund us forever? No.

More like now the rest of us non-EU users are no longer help paying EU taxes because it was taken out of the general funds LL collected. I’d not expect LL or other users to pay my states sales tax for me, why should non-EU users pay VAT for EU users. LL likely could have announced it better but the bottom line is EU users now have to pay the VAT that there government is imposing on them. It is not an LL cost to pay EU taxes and in all reality should never have been paying the tax out of the LL pocket.

Isn't it up to the EU to reward its citizens for paying their taxes?

Would you base this simply on the standard stipend or amount of land owned. If the later it's the large land owners who are being penalised the most so you are talking of it being directly related to tier, again LL cutting into their profit.

Countries taxes have always started and stopped at their shores. It may seem unfair in this new genre of online world that a bunch of pixels gets a different price according to where the computer user is actually sitting but I think this is just something we're going to have to swallow.

No, because you shouldn't be rewarded for doing what you're supposed to do. The fact that the VAT legislation as it stands (and predating SL) affects us badly doesn't mean it doesn't apply to us.

Oh then lets extend to people that over pay for monthy fees and year fees like me which pays in yen. I am always losing money because i paying my fees in yen and not US monies . Give us a increase in weeky pay too...........

I'm pretty sure that LL, as a business, pays income taxes or some equivalent in California. We Europeans are also paying for that. Is that fair ?

In Europe, the payment of VAT is under the responsibility of the supplier. Whether the supplier charges the VAT to the customer at 10, 50 or 200% percent is irrelevant. The VAT inclusive price is what counts.

In a global market, prices are always set my marketing people asking "how much are they prepared to pay". They determine a retail price. In Europe, the retail price always includes VAT. This is a cultural difference.

This is also why most prices are the same throught the EU, regardless of the various VAT rates: the supplier is mutualizing the cost of VAT. The retail price is the same whether you pay 17% ou 25% VAT. The supplier simply adjusts it's excl. VAT price and takes the hit.

This is what Blizzard, eBay, paypal, iTunes, Virgin, etc... all do ! These companies don't charge in US$ and add VAT as if it was some kind of US sales tax (which it isn't).

Now lets look at it in terms of costs and benefits.

In order to do business with European customers, LL has to pay european VAT. This is a cost, that has the benefit of opening up SL to the European market (which is what, 40% of the current population in SL ?). This benefits both LL and also non-EU residents in terms of revenue and cultural diversity.

LL can choose to not pay VAT, and stop doing business with the EU, cutting itself off from a major part of it's customer base.

LL can choose to pay VAT, and pass it on directly to it's customers. This creates two unequal pricing policies (EU and non-EU) that are supposed to compete, giving a hugely unfair advantage to non-EU landlords for example. Many of these will be forced out of business, causing a loss of revenue for LL.

LL can choose to pay VAT, and mutualize it as a direct cost, just as it does with it's own California taxes, it's electricity bill, the rent for its offices in Brighton, and so on... Maybe prices will have to be hiked across the board, but that's a marketing decision to be made based on "what people are prepared to pay". Some people might quit as a result, but most EU and non-EU landlords will stay on board, maintaining the economy and LL's revenue.

Of course, cost/benefit analysis is not one of LL's major strengths.

Maybe the best solution would be something in between, just like what most other companies do: have different pricing policies as US$ excl. taxes in the US, and GBP et EUR incl. VAT in Europe, and mutualize part of the extra costs. Different markets, different environments, different pricing schemes. Other companies understand this. Why non LL ?

Any preferential treatment given to those affected by the VAT ammounts to a subsidy.

SO we all would end up paying.

If you give them Lindens , everyone pays becuase of Inflations.

If you give them a discount, everyone will pay when the Lindens need to raise fees to cover it.

In the end either the Euros pay their own taxes, or everyone in SL pays the Euro's taxes.

Just like everyone in SL is paying LL's California taxes.

Sorry, I am not for socializing SL... as much as it is a dictatorship already...

The free economy works. Apply pressure to the union that imposed the tax on you...not to the company that is only following the laws of the land.

Huge difference being that LL is located in the US and thus has to pay income tax on its BUSINESS. Its absolutely and entirely fair you are paying towards LL's corporate taxes. Becuase they are taxed on what they SELL. .

the VAT isnt a tax LL owes, its a Tax YOU owe that LL is obliged to collect. the VAT is a tax levied on what you BUY.

LL is paying their taxes based on money they get from us.

When they pay the VAT they are paying your taxes. Not mine.

He'll turn that around by saying that technically VAT is something that the merchant is obliged to pay, whether they pass it on to the customer or not, but at the end of the day LL is going to view this more like a sales tax than like its own income tax.

BING! Exactly.

Can we stop having these threads now ya think?

Most companies operate in a way where one segment of their customers is subsidizing another segment.

If you're paying fees directly to LL, you're paying for:
* your own usage
* costs incurred by LL for operating the grid + staff
* cost of offering basic accounts at no monthly cost
* educational pricing at a net loss to LL
* cost associated with free voice for everyone
* etc

If you oppose paying for something that doesn't benefit you, you'll have to oppose every other thing you're indirectly subsidizing in SL as well.

I think the only "proper" way to know if LL should or should not subsidize the price increase for Europeans is to compare the loss they'll incur by increasing fees for European residents by 15-25% to the loss they'd incur by raising everyone's fee say 10% and that's not anything any of us can answer.

LL is doing business in the EU with EU customers, so it has to pay VAT.

LL could choose to relocate to the Cayman Islands so as not to pay income tax on its business. A quick cost/benefit calculation shows that this is probably not the best course of action.

Likewise, LL could choose to not to do business with EU residents so as not to pay VAT. Again, cost/benefits says this is not a good idea.

Having EU customers has a cost, but it benefits all SL residents, not just Europeans.



Wrong. VAT is a tax on added value, not on sales, that LL owes. LL has total freedom as to how it passes the cost on to its customers. VAT is NOT sales tax. Please read above where I explained the way pricing works in Europe, and how all other US companies have adapted to it.