Questions LL should answer re. VAT

OK we've all let off steam re the VAT charges and as yet LL have not responded apart from a single interview given by Robin Linden. Therefore, without a commentary or narrative can we list the questions we'd like LL to answer in their Blog post if ever it comes.

I've kept mine brief knowing that others will pick up the other pertinent questions. Please add your own and I will copy and paste to the list.

1. How long have LL known that European residents would have to pay VAT?

2. Why did they never notify us that we would at some point be charged?

3. Will they move billing back to the US to give an equal financial platform to all?

4. Why were they selling; mainland land an islands up till the last moment to Europeans at pre-tax prices?

5. If a price doesn't indicate that VAT is included, the consumer should assume it _is_ included. A business can't suddenly impose a VAT surcharge after a price has already been agreed. So why have they backdated a VAT charge on the existing billing period? I'm not being an internet lawyer here. That _is_ illegal.

6. Related to the previous question: Why haven't we been given notice of one billing cycle? I believe that is also required by law.

7. If _all_ LL transactions are being processed in the UK, why isn't a 17.5% VAT charge being levied on _all_ Second Life users, regardless of their location?

8. ok can someone tell meif this willa ffect tier on group owned land when one of us is in the uk and other in the US

9. Basically LL has changed the charging model for EU customers from

$295 total of which $251 goes to LL and $44 to the taxman

to

$346 total of which 295 goes to LL and $51 to the taxman

An proper explanation of why this increase was implemented without a period of notice (which is legally required in some EU member stated) is still outstanding.

10. LL is legally obliged to either charge the advertised price as if it included vat, or else note in the advertised price that vat is not included. In that sense, Europeans have been paying vat all along, as it is implicitly included by virtue of not being specifically included.

By increasing the total paid in the way they have, LL is effectively increasing the price for Europeans, which breaks a rule about a required minimum of one billing period of notice before raising any prices?

11. If I am in world and press the little blue button to buy more lindens am I going to be taxed everytime?

As dissapointing an answer as it is, Robin answered that one in the interview: "You can't say, guess what you're supposed to be paying taxes, so plan to start in about two weeks.". It doesn't really answer anything, but I'll think she'll stick to that explanation .

That one is actually answered in the external article Robin's post links to: LL owes a EU member state VAT if does any business with its (non registered business) citizens.

Please I asked for questions not commentary and yes I would have liked a "guess what you're supposed to be paying taxes, so plan to start in 2 weeks". Number one I've just bought an island in that time and number 2 prices advertised in the UK are supposed to be VAT inclusive unless otherwise stated.

1. If a price doesn't indicate that VAT is included, the consumer should assume it _is_ included. A business can't suddenly impose a VAT surcharge after a price has already been agreed. So why have they backdated a VAT charge on the existing billing period? I'm not being an internet lawyer here. That _is_ illegal.

2. Related to the previous question: Why haven't we been given notice of one billing cycle? I believe that is also required by law.

3. If _all_ LL transactions are being processed in the UK, why isn't a 17.5% VAT charge being levied on _all_ Second Life users, regardless of their location?

You might be interested to know I put very similar questions to the Concierge Support this afternoon.

Initially I asked at what point LL decided to apply VAT charges to EU residents, I was referred to the web site secondlife/corporate/vat.php and informed that VAT was a requirement in EU countries.

I pointed out that I was aware of the web site and also was aware that VAT had been a requirement within the EU for many years (in fact decades in the UK). However what I wanted to know was when did LL decided to apply the VAT charges..specifically before or after I bought an island.

The Linden helper informed me that he didn't think that me buying an island was a factor in the decision (I assume he was being sarcastic).

I then pointed out to the Linden helper that the application of VAT most certainly WOULD have been a factor in MY decision to buy the island and that had LL published the fact that they were intending to apply VAT 'would have influenced my decision'.

At this point there was a long pause and no further explanations were forthcoming, I logged out leaving the message that I thought their final comment in their E Mail was rather premature "Best regards and thank you for your continued support"

Perre

Sorry..questions not commentary

VAT is only applicable to transactions for services provided in EU countries to EU residents, just like in the U.S.A. a business is only required to collect sales tax when the transaction involves a resident of the same state in which the sale is made.

This forum is the Resident Answers forum (not Linden Answers). If you want LL to answer them try posting them as comments on the blog.

http://blog.secondlife.com/2007/09/28/questions-about-vat/

Damn, I was determined to sink you with us. /joking.

The analogy doesn't quite work but I take your point. If the American system was like the EU system, you would have to collect sales tax when selling goods between different states. Here the UK is a State, France is a State, Italy is a State, and the EU is trying to become the United States of Europe. If I (in England) sell something to somebody in a different EU state, I have to charge VAT.

Based on your information, it sounds like anyone with a brain in the US will always buy
everything they need via the internet, from an out of State supplier.

I think you need to read his post again. In particular, the second sentence.

ok can someone tell meif this willa ffect tier on group owned land when one of us is in the uk and other in the US

Knee-jerk reaction, the blog post has already came. Unless this thread were submitted to someone LL wouldn't know these questions existed.

I'm curious why they didn't post on the public corporate mailing list.

Phoenix: I have trouble imaging LL applying the tax to anyone else donating tier to a group besides just the person(s) living in the EU.

The person in the UK will have to pay 17.5% for their tier.

yes but land owned by both so how will we work this hoe can they say apply vat to my tier

It's not the land being taxed, it's the transaction.

Yes, many of us do that now. As long as the shipping costs don't outweigh the sales tax. So, I use the internet for a lot of my non-perishable and non-heavy items. However, it only works for internet companies that do not have a store in my state. If they have a presence here, then they still have to charge me tax.

However, Robin goes on to say that "LL have been absorbing the costs" - i.e. EU customers *have* been paying taxes anyway! Its just LL hasn't been left with as much money after the taxman has taken his cut than they would have liked!

Basically LL has changed the charging model for EU customers from

$295 total of which $251 goes to LL and $44 to the taxman

to

$346 total of which 295 goes to LL and $51 to the taxman

An proper explanation of why this increase was implemented without a period of notice (which is legally required in some EU member stated) is still outstanding.

Matthew

LL is legally obliged to either charge the advertised price as if it included vat, or else note in the advertised price that vat is not included. In that sense, Europeans have been paying vat all along, as it is implicitly included by virtue of not being specifically included.

By increasing the total paid in the way they have, LL is effectively increasing the price for Europeans, which breaks a rule about a required minimum of one billing period of notice before raising any prices.

This is going to sound sooo dumb.. but I cant seem to find a straight forward yes or no.

If I am in world and press the little blue button to buy more lindens am I going to be taxed everytime?

Thanks all

Tiana

as I understand it... yes.

Inc

^ That sucks. So greedy.

Got a source for that? That's the only item excluded from the LL's list of affected transaction types:

http://secondlife.com/corporate/vat.php

I wasn't commenting strictly speaking, I was highlighting items that were answered already. In general you can hold your breath until you turn blue, but LL doesn't have a track record of ever providing "useful" answers.

Your best bet would be to go to Robin's office hour on Tuesday (or find someone you know who's going to ask your questions), but be prepared to walk away with no real new information.

You don't pay any taxes on L$ buys at the moment (not entirely sure how LL internally handles Supply Linden sales though).

That list is not a definitive list.
"Anything that you pay Linden Lab for will have VAT applied. This includes: .."
"This includes", as opposed to "These are".


"Anything that you pay Linden Lab for will have VAT applied."
If I buy L$, I'm paying LL for them.

Another question.

Lets say I have $150 in my account (e.g. from selling L$ on the Lindex) and my mainland tier is $195 - do I pay VAT on the whole $195 or on the $45 which is what LL will charge my CC having paid the first $150 from the credit on my account?

Matthew

When you buy L$, you buy from other residents selling them. The only money LL take on that is commission.

I assume it wouldn't be taxed anyway, currency conversion isn't taxable.