VAT Clarification and Extension

Oh we've revised those silly world war one rules!

If the panties are tight enough, they may prevent your head from exploding...

This isn't a one way street though Colette. I've purchased duty free products in the states, that means I'm getting them cheaper than you are.

This would depend upon whose wearing the panties! Where's Cherry when I need her.

You are comparing a relatively small market (duty free imports) And a MUCH larger impacts of the VAT system and how it hurts US / Europe free trade.

It seems on most US imports you have a protective Tariff in place. The only reason VAT in SL really hurts you is there is no suitable European competition. Unless there was that competition and you still chose SL.

If a Non-European buys from a European, then they do _not_ have to pay VAT.

If a European buys from a Non-European, the Non-European should collect the VAT and pass it to the European taxman. If they don't, and physical goods are involved, then the customs office will do it for them. Either way, the Non-European does not have to pay out any of their own money. They simply have to collect the money from the European and pay it on.



How does that make any difference?



But this would ruin the competitiveness of the business, due to the extra hassle for customers - especially since it would not force US businesses within SL to collect VAT, which is a necessary point.

?? You are aware that trade tariffs apply in the US, right? We can't ship stuff there duty free.

Ok in light of some comments on here, this has made me chuckle

"US duty and taxes

Your products may be liable to import duty. The level of duty varies for different products. Responsibility for US duty and taxes will depend on what you have agreed with your customer. To compete with local suppliers, you may have to quote a fully inclusive price (ie including all US duties) and arrange delivery to their premises."

Yes but importing is different from this situation. LL has imported nothing into the EU. You bought your keyboards there, you are typing on them there, you have downloaded a viewer to view things on servers in California and Texas. Yes you are paying (some of you) to own virtual land on servers located in the US, but subjecting this to VAT is nonsense. Nothing is being imported anywhere. This should be known as the "EU Keyboard Tax".

Yes but the EU have done this to protect European business and it appears that in some parts of America, they do the same. Maybe not on electronic services, but certainly on some services and goods Victorria.

I've pointed out that this protection is wide of the mark where SL is concerned, that it's created the situation that the directive was intended to prevent but I just find it amusing that some parts of America not only apply taxes, they also protect consumers and business by requesting fully inclusive prices, something some Americans have been mocking us for.

Ah.... the difference is that VAT is a tax on consumption, rather than a tax on sales. Thou art consuming within the EU, therefore shalt thou pay - according to the Directive anyway.

Inc

Oh quite. It is a consumption tax without question.

The difference being the EU charges similar tariffs AND the VAT.

The VAT makes no difference to the seller. It puts them on a level footing with those in the EU.

Ok maybe Brenda was right.

Okay I should have said fair trade rather than free trade. Happy now? Me using the incorrect word doesn't make the much smaller Duty Free Market somehow a very significant chunk of US to Europe Exports, no matter how you chuckle.

No it doesn't

Because those in the EU get a remittance - they can claim part of their VAT off becuase of the cost of doing business.

You said so yourself.

Oh I'm going to spank you. As those who haven't had to pay VAT in the first price can offer lower prices, that pretty much levels the playing field.

It was the fully inclusive prices part that made me chuckle

You said if they pay $100 in VAT they get claim $100 off VAT when they Sell.

Wheres the leveling part?

It does not. The reason being that the non-EU remitters will have very little (generally) to offset against the VAT they need to remit. So it is not a level playing field, it is protectionism and the Euros (not you .. I'm thinking here of Yumi) who want to internalize this into SL can jump in a lake (yes this is a mostly PG forum so I am biting my tongue quite hard in moderating my comment).

Nope this would only be true if the US didn't have taxes associated with bringing products to market.

Basically the European Company pays the VAT but the final VAT is remitted (subsidized)

While the US Company exporting pays final VAT, but the other taxes related to production can not be subsidized because according to the WTO that is an unfair practice.

the fully inclusive prices is a smokescreen - I cant believe people care one way or the other.

It should just be clearly labeled. "Plus Tax" or "Includes Tax"

If a European competition would exist, the same situation would be found there because they would not have to pay VAT for US-cunsumers. VAT would only have to be charged to EU-customersand not the rest of the world acording to this source: http://merlin.obs.coe.int/iris/2002/6/article5.en.html



So I would have to pay VAT no matter who I choose and you wouldn't have to pay them no matter who you choose.

Frankly, I think its time the EU gets off its high-horse and realizes that in an internet-based, global economy, they have no legal right to dictate to EVERY SINGLE COMPANY in the ENTIRE WORLD that has a website which offers things for sale, exactly HOW that website MUST present its prices! In this day and age of the internet, websites for businesses based all over the world are available at the click of a mouse to EU residents, and that's a good thing. But what gives the EU the right to then dictate to that foreign business how it displays its prices on its webpage? Particularly for a company selling things which are delivered entirely electronically via the web so that no shipping is required, anyone with a credit card or other valid payment method can purchase and take delivery of assets offered by companies anywhere in the world.

I strongly believe that the EU has NO RIGHT to dictate that a non-EU website list its sale prices including VAT, thereby forcing all of us non-EU residents (including those in the country where the business is located) to do extra math and calculate what OUR price is after deducting the VAT that the EU supposedly dictates must be built into the displayed prices. NONSENSE! And, what's the penalty to a non-EU company and just HOW does the omnipotent EU propose to enforce and collect that penalty??

If I, as a U.S. citizen, decide to purchase things from an EU-based company via their website, then I have to understand that I need to deduct VAT from the displayed prices, as I'm not obligated to pay the VAT that the EU demands "be included in displayed prices" on those websites. By the same argument, an EU resident who decides to purchase from a U.S. based website (such as Linden Lab) should understand that they may well need to ADD VAT to the displayed prices, as its the custom where THAT website originates to display prices "pre-tax" to THEIR local consumer base.

Is there some reasonable compromise? Yes, I think Colette's idea is good. Leave the displayed prices as is, that is without taxes, but put a small asterisk next to them, which leads to a footnote about EU VAT and a link to a page with multiple tables, country by country for our EU friends who don't wish to be bothered with calculating the VAT themselves, but would prefer to have it "hidden" (which is a proven psychological ruse to pacify taxpayers and minimize resistance to the tax in the first place.)

Horse-pucky! If I, as a non-European, have a small website which offers things for sale and a European chooses to buy from me, the EU has no legal authority to force me as a non-European, to familiarize myself with everything about the EU tax laws, and take the time and effort to collect their taxes and remit them. If they can make it happen themselves via the customs office, great. If its electronically delivered goods and they can't - so sorry, not my problem.