Increase stipend for EU users?

Exactly my point! Thank you!

No - becuase there are people who dont want to pay more even though they cost LL more.

The argument should be made at its source that LL shouldnt have to pay these VAT taxes.

As long as its paying the taxes, then the bill needs to go to the person the tax is being paid for.

Or maybe increase it for US people who have been at a disadvantage for a while because of the weakening US$..

Whether you regard it as LL collecting taxes for the govt or customers having to pay extra to cover LLs tax bill, it's just a matter of culture that doesn't make any practical difference.

If you don't want to pay, cancel your tier payments... but people won't do that, they just complain.

You mean free account campers ?

I get how the pricing works - and you provided no information that those US companies are even paying the Tax.

After All LL never did until recently.

from our Standpoint its a Sales Tax. Its a Tax they pay based on how much people from those EU countries buy, becuase they bought it.

Just becuase the VAT is claimed not to be a sales tax, doesnt mean it isnt.

.

As an EU taxpayer I can see no justification at all for this. It is not LL's fault we have to pay VAT, and they could have been making us pay it all along. They have in fact been subsidising us, which means that players outside the EU have been subsidising us. The only gripe we have is over the amount of notice we were given.

A basic account is free. Thats LL's policy. Theres no limits placed on the free accounts at this time.

Whether they cost LL more is therefore not relevant.

As I understand it, Sales Tax is a tax on the customer, whereas VAT is a tax on the supplier. If the customer is VAT registered, then the tax moves down to them and they pay tax based on their customers (recurse as necessary)

The bottom line is really simple.

Either those from Europe pay these taxes or everyone will. Becuase LL will have to raise their prices to compensate for the loss.

You are never going to get me to think its fair my prices should go up becuase of European draconian Tax Policies.

True, but the usual practice is to pass the cost of the tax on to the final customer. The money that ends up in the Treasury's pocket comes from the purchaser of the product and is very similar to a sales tax in effect.

I never said they should - I posted on the first page that it is not LLs responsibility to compensate EU residents for this.

I was merely explaining the difference between Sales Tax and VAT, from the viewpoint of who should technically be paying it.



They can, but they don't have to, as somebody else said earlier. LL could have, if they wanted, paid it from profits or increased fees for everybody (I'm not saying they should, btw). With Sales Tax you don't have that option as it is a tax on each individual transaction.

Ahh I see.

Then what Terra is saying is they SHOULD increase fees for everyone to cover the EU VATs

Yes but thats a technicality. In economic effect, the VAT is a consumption tax, just like a sales tax is. Arguing technicalities about who is technically liable for the tax is not useful when we all know that the tax is virtually always passed down to the end user consumer, who bears the burden of paying the tax economically. Economically, it's Europe's version of a consumption tax, and therefore non-Europeans should not have to bear any increased costs relating to LL as a result of any "equalization scheme" designed to subsidize Europeans because of the impact of their own consumption taxes.

Dead on. The VAT is not a tax for merely having a business presence in the EU - it's leveled at and measured by the location of the end user. It is a stealth sales tax, and LL is sticking the cost with the appropriate end user.

I seriously doubt that many businesses entering international markets do so on the basis of blindly using their domestic price as the pre-tax consumer price in other markets.
If LL had entered the European market as a market, they could have set whatever price they wanted to in Euros. That price would inescapably have been VAT-inclusive to consumers, because it *has* to be. Nobody in other markets would have thought to complain about subsidies. EU consumers would have looked at the prices and either bought or not.


Hey! My stipend is 300L a week. Some people get higher stipends. I'm subsidising them just because they were here before me!!!
And some people are sitting of free land!!! That's not fair either.

First Land for some but not for others, depending on when they joined? That's not fair either.

And hey! I signed for for annual membership at US$70 per annum. Monthly paid accounts pay more per year, but if one takes into consideration the interest rates, currency fluctuations, the stock markets and the orbit of the moon divided by the weather, either monthly accounts are subsidising annual accounts or V.V. That's not fair either.

And Hey! Hey Hey!!!
WTF is this with the FREE accounts????




It's all a matter of perception.
The main problem here is that LL has seriously screwed with perceptions.
Hence all this fuss.

My thought was to augment the normal L$300 stipend paid to premium members a little. I estimate another L$50 / week would about account for the VAT on that. And maybe only for current members, not new ones. And maybe only for the length of the current contract. It's just a gesture to soften the blow and the fact that this was so sudden.

Absolutely bang on Colette!

The price that LL put on a any type of membership is up to them to set as policy. Whether they cost LL more is therefore not relevant.
So Free, Monthly, Quarterly, Annual, Age-Verified, Underage-verified, Unverified, Swedish variations, USA variations, .....

If I understand you correctly

VAT is a tax on the seller, not the end user here, it isn't US sales tax, and the reason our prices always include it and yours have it added at point of sale. I could be wrong, but in the US it is done in a way that the VAT is collected from the buyer.

LL have to pay VAT now if they wish to sell their services to Europe and increase it's user base, it's their business to balance their books on what is profitable and what isn't. I assume at this point they have thought hard on how it will effect European business in SL and how much less revenue they will get when people tier down to match their income due to the uneven trading terms on the grid now.

I have no idea how it works in this situation, but if LL are VAT registered and being charged on how much they sell, how do they do their purchase VAT to offset againsts the costs?

Isn't the VAT collected by the EU used for something that benefits EU citizens?

cute.

The decision to have free accounts was a LL business decision. It was based on trying to get more people into second life. If people use those free accounts for camping, dancing, shopping or simply exploring its not relevant.

Thats not the same thing as the fee structure.

If my land costs me $100 US a month - and someone in Germany its also $100 US a month but theres a 19% tax that means LL gets $100 US from me and only gets $81 US a month from the person in Germany.

Therefore the prices cant remain the same for me and the german - if it does I am paying MORE for the same amount of land.

I agree, but the Europeans will respond by saying that they are paying the same amount you are, it's just that LL is netting less because their cost of doing business with Germans is higher due to their VAT obligations.

To which I would respond that LL's overwhelmingly likely response (and in fact where they are landing here) is to simply add the VAT to a new (higher) "all-inclusive" price for Europeans, like Blizzard has done for WoW. For Europeans to expect LL to eat into their own cut because of the EU's VAT laws is nothing more than an exercise in extremely wishful thinking.

Don't fool yourself into thinking this isn't a sales tax. It's not something levied at LL for simply having an EU presence. It's not a general income tax on LL's business - it's a stealth sales tax that works in the reverse because the merchant is not obligated to collect it at the till, but they have to pay it anyway for EU customers alone. If it wasn't a sales tax, what difference would it make to you if VAT was or wasn't included?

I've decided there isn't any point arguing, as they seem to believe their quaint customs are the laws of the universe.

I don't see any validity to focusing on one number for one group of people. Since governments charge different tax rates and provide very different services, and since monies are worth different relative amounts, and so forth, it can't be fair.

If Joe pays a tax that provides services that he benefits from, how can you make someone who will not receive those benefits pay it? Given enough time amounts of disposable income and their relative worth could be roughly calculated by taking into account all the factors for each location's residents, but I doubt it would turn out as some people think it would.