Linden CAN charge Europeans VAT it seems

A new thread, to capture your attention.

Linden's plan to charge VAT to Europeans who buy land/islands pay tier/island maintenance, is kosher, it seems.
There is an new international agreement which allows them to levy VAT for electronic services as they propose to do, according to my tax inpector.
UK citizens should phone 0845-010-9000 and ask the VAT expert there for information sheet 0103.
Check for yourself; at any rate, as I see it the only way to be exempt is to register as a business to pay VAT, and then to make the case for exemption based on being below the level of turnover that qualifies for VAT; or to have an educational account established with Linden, getting the educational institution to agree for you to use their VAT number.

Come on, you don't think people round here are going to stop bitching just because LL are complying with the law do you?

...must

Yes indeed.... and therein I hear the death-knell for all of us. At present the tax applies only to land sales and tier within SL... but soon the tax workers of all nations will extend their palsied grip onto ALL revenues within SL.

The good times are ended!

It may be kosher that LL has to pay VAT .. now why this is so is beyond my comprehension, but I'm not a VAT expert. We have a virtual product (virtual = temporarily simulated or extended by computer software). Since VAT stands for "value added tax," I'm at a loss as to what "value" has been added, and to what. So, for lack of a better definition for VAT, I'm assuming it is really a "sales" tax - just a REALLY BIG FAT sales tax. In California, e.g., we pay 8.25% sales tax. We don't like it, but we live with it. If California were tomorrow to say "Guess what, folks .. the sales tax is now 17.5% .. or 21% .. or God forbid .. 25% .. the freeways would be clogged with protesters instead of cars for a change. So, given that LL MUST pay this tax, whatever we call it, their lack of common sense in making it well known to everyone well ahead of time is unconscionable. LL's statement that "we) did not initially do a blog post believing a general announcement could be confusing for those Second Life Residents not impacted" is insulting, degrading, and unbelievable to anyone from any country whatsoever. Are they insinuating that while the unfortunate Europeans (read: victims) would certainly understand their situation (since they'd be getting the shaft in their bills almost immediately, if not sooner), while the rest of us would be too stupid to understand what was going on? No, LL, we understand all to well what is going on. We are no less educated or intelligent than Europeans, and we are no less angered and insulted at the way they have been treated by the company that takes money from ALL of us! The problems that affect Europeans impact all of us. We do not sit at home in the US or Canada or elsewhere thinking "Oh, thank God that isn't happening to ME" .. We understand full well the implications of a severe financial impact on European Second Life residents - and that impact affects every one of us. Those who wish to rent land from any European resident-owned property will have to pay additional sums so that the owners can still afford the land tiers. Those unfortunates who purchased land after careful consideration of their budget and what they can afford for land tier fees are now surprised at a substantial increase not budgeted for. They can sell the land, of course - IF they can afford to keep paying the tiers while they try to find a buyer (bet your bottom dollar that buyer won't be another European) .. of course, land values have plummeted in recent months, so lots of luck trying to unload that anchor around your neck now. For reasons too numerous to mention, and factors beyond my understanding, sales in general in SL have seemed to plummet in recent months. There is a general feeling of malaise and discontent in the community. We have managed to maintain our sense of humor through crashes that caused our hair and jewelry to show up in unmentionable places when we finally got back into SL; we have laughed our way through inability to tp anywhere, lag, bugs, griefers, and a next-to-total disregard of our complaints by "customer service." This is the straw that broke the camel's back - such a complete disregard of community relations as to drop this HUGE tax on our European friends and neighbors without warning, and adding insult to injury by implying the rest of us would be too stupid to understand it. What we understand is that LL did not want anyone to know of this ahead of time - Europeans or anyone else - because they were not competent or capable to cope with the outpouring of outrage that they now face in any case. We love the idea of SL .. we love the creativity and camaraderie of SL .. we can't wait for the next generation of an "SL" - one that will care about its paying customers.

Yes, for those who don't know VAT or Value Added Tax is a sales tax paid on most things in most European countries. I'm not certain for all, but in France it is by far the highest taxation paid by residents to the Government.

What complicates this issue further is the fact that the rate isn't standard in European Countries.

As a basic example, England pays 17.5% whereas France pays 19.6%. Some countries are higher, some are lower.

Another issue is that some French departments are actually in Africa and elsewhere. They pay VAT, but are not in Europe as such. How will this work?

And I am assuming that the tax collected for European Governments by Linden Labs will be paid to those Governments?

To Cookie Kappler :
There is an info that I don't have ; as Californian resident, do you pay something as taxes to LL ?
Thank you for your answer

As far as I am aware, the 8.25% sales tax may be included in the tiers and premium charges by LL. Since LL is a California-based company, they will be subject to California tax laws, including sales tax laws. As a California resident, I will be subject to that 8.25% sales tax. If someone from New Jersey purchases a product or service from a California company, I don't think they are subject to the same tax. If I am wrong, I stand to be corrected. Since SL (LL) has not shown me any separate charge for sales tax in my billing, I am assuming that if I am subject to it, it is included in the fees I already pay. However, many Europeans made the same assumption, to their detriment. I may be cutting off my own foot here by this posting, but this is the truth as I see it. You can be sure that if LL has done this without warning to Europeans, it is only a matter of time before the rest of us, no matter where we live, also get shafted without warning. I am not saying LL is being dishonest .. I have no doubt that they are subject to laws that require them to raise their charges. What I am vehemently opposed to is a company making a change in prices that severely impacts their customers without warning or prior explanation .. and further ignoring the complaints of their customers.

As always, LL closes comments fast.
Well, at least here it's still open.

!!! SECOND LIFE IS A SCREW UP !!!!

NOW WE EU RESIDENTS HAVE TO PAY VAT SUDDENLY ???
NOT 1 NOTIFICATION WE HAD SOME WEEKS AHEAD, JUST OVERNIGHT WE GET CHARGED !!!!
VAT IS EXPECTED TO BE IN THE PRICE; VAT UNDER EU REGULATIONS IS MANDATORY SINCE 2004.

THIS IS THE MOST INCOMPETENT INTERNET COMPANY ON THE GLOBE !!!

Cookie Kappler : Thank you for your quick answer. I am surprised that you have tax included and the prices announced by Linden for all the World are the same ; did Linden charge Californian VAT for the rest of the World
==========
I observed a strange fact : I'm french and I pay LL with a credit card (Visa); when I check my bank account, I see the LL charges are not from USA but from UK, exactly like LL would be a British company (since I signed for SL, not just at this time).
If it is possible, can an USA resident check if he is billed from USA or from UK (or any other part of the World) ?
This question is important as I suspect the Billing Departement of LL had relocated a part of their activities out of USA.
Thank you for an answer.

Since I posted the above text, I found that surprising employment offer : http://lindenlab.com/employment/techbillsupport
Extracts:
Application For Technical & Billing Support Supervisor
Department: Billing
Work Location: Brighton, UK
Employment Status: Regular Full Time
* Must live in the UK, in or near Brighton
Responsibilities:
* Act as a bridge between billing, technical outsourced support team and Linden Lab

Garmin Kawaguichi : As you are French, but are billed through your Visa from the UK, it will be interested to see if you are charged the 17.5% UK rate or the 19.6% French rate, n'est ce pas?

For Raivann Brissot : I checked my last debit, it was out of charge; this is because it was before the VAT announcement.
BUT
in my SL account, it is written:
Total monthly cost: US$233.22*
Next bill date: Sunday, October 21, 2007
* Includes Value Added Tax (VAT). If you wish to provide
a VAT Registration Number, you may enter it on this page.

Up to now my fees was : US$195.00

I conclude the VAT applied to my fees will be: 19.6%

That's right?

Like explained by Linden in its site, the VAT rate is from the residence country.

I do not say that tax is included in my charges. I say that I "assume" the taxes are either included in my charges - or - that the government(s) have not yet found a legal way to get their greedy hands on my money. I assure you that the minute a federal or state government can find a way to grab my few dollars, they will do so. IF the California sales tax applies to my account - and I do not know if this is so (yet) - then it must be included, since I see no charge for sales tax in my account.
I do understand that Linden Labs has a business office in the United Kingdom. Awhile ago, when I tried to purchase some Linden dollars, my credit card company refused the purchase, since it came from the United Kingdom, and they had never seen a purchase from there before. I had to call them several times in order to convince them that I did authorize the purchase. Whether Linden Labs' decision to create an office in the United Kingdom is a factor in the VAT situation, I have no idea. Since Linden Labs refuses to treat us as responsible, intelligent, educated adults (I think I DO recall seeing that only adults may legally use the service), it is difficult to tell what, exactly, has led to the current problem. There is only one thing at this point that I AM sure of: Linden Labs have a long, long way to go to engender any kind of trust in its company.

--- I forgot -- Thank you, Christi - you have truly helped with your knowledge here; I appreciate the work you have done to find facts!

Cookie Kappler : I agree with you and I thank you for these important informations : at least one american citizen was billed from UK.This proves that the presence of LL in UK is not (only) as a help to European residents but a real relocation of their billing activities.

In the US so far we have avoided the issue because of a federal law prohibiting taxes on internet services. In the eyes of the US government, at least, Linden Lab is an internet service provider, and ISP services cannot be taxed. Also VAT is unheard of in the US, and I hope it stays that way! 17% up to 25% tax, along with all the rest of the taxes you have to pay? That's insane!

I cannot agree with LL dumping this additional charge onto European customers without a decent warning. They should have given 6 months notice for people to decide what to do, not spring it on everyone at once, and not try to keep it under wraps. As has been said, everyone in SL is tied together in various ways, and what effects one group of residents effects us all, so to not make public announcements long ago about this is stupid of them! For them to ignore the uproar over it is even worse.

As for the existence of the VAT on internet services, well, blame your politicians! Better yet, go vote.

VAT is used as the main way of taxing rather than lumping it all on Income Tax (at least in France);p It still hurts but you feel the pain less.

But now I am confused, and what follows may reflect that. I apologise in advance.

As has been mentioned before, VAT is included in the cost of things we buy, including the Internet, since 2004, so, had I given it any thought I would have assumed that this cost was included.

Having said that - the thought had never occured to me as we are always being told that we abide by USA and, in particular, California laws on these matters as Linden Labs are based there. Wasn't this the case given for the abolition of gambling even though no such abolition exists in other countries?

So, my rather garbled question is - which is it? USA/California or our own countries?

And yes, I too wish they had given us prior warning. After 2 years in SL I bought my first Island 5 weeks ago. I think it will shortly be for sale, if I can sell it..........

The politicians say if you want less of something you tax it or tax it more- so what is this really?

People dont watch tv as much as they used to and people from all over the world are talking to each other about their governments and lives and real connections are going on but some of the big boys want to come here and chew up our little worlds and make money from them because they are jealous hehehe

So what they want us to do is come back to the couch and watch commercials- Everybody in sl and all the other digital worlds should relax this thing will blow over-

taxes should be paid ONLY when virtual currency is converted to hard currency meaning that taxes on stuff we sell to each other inside these worlds probably should not be taxed because we already pay

1. tier and other upload fees which should be regarded as a tax-
2. we pay taxes on our internet connection
3. and taxes on the computer and equipment we used to access the game
[the only way to see this game or any other that has currency is to spend money on a fast computer]
4. We also pay our local taxes for the electricity which we need to power all this crap-

So in my opinion to even access SL you gotta have a thick layer of beauracracy and taxation in place that is well funded and stable.

But when one decides to pull money out of the game and make it real i dont see anything wrong with taxing it on the spot as income LL should simply deduct their little fee that they already do- and then depending on the country you live in 5% 10% whatever the people of that country decides should be skimmed off the top- end of story. Virtual Earnings Tax



The problem is that these digital worlds are new and all the million dollar hype has power hungry people worried that they dont have power over absolutely everything [their p*n*s is flexi] the worlds got here before the laws did so now we have to go through the beta testing of virtual taxation

really what sl should do is move an office to Dubai and give us virtual citizenship and the only tax we pay is teir muahahahaha!

the dollar fell so low pretty soon me lindens gonna be worth more than my dollars

No. Taxing of Internet services here is prohibited by Federal Law. However the Law is up for renewal in November, some say it will be extended again, some say it will not, leaving the individual States to decide.