Petition LL to pay the VAT themselves and fund costs another way ?

As an American, I now have an unfair advantage over EU residents. I think it's unfair, anyway. The advantage has nothing to do with your hard work or worth of your product or service.

Solution: LL goes back to paying the VAT tax, and finds another way to fund its operating costs and "spread out the pain". I would be willing to spend one more USD a month to help out. Maybe two USD. There MUST be a way to level the playing field again. I believe in honest competition over quality of service and/or product, not something artificially induced. If the USA raised taxes on me by 20%, I'd be in the exact same position as you in the EU.

What do you think ? There MUST be a better way than this !

As a European I would say no. I think your attitude should be commended Steve, but I doubt any level-headed european would expect US citizens to foot part of their tax bill. The way the situation affects european business & leisure players alike sucks, but I really can't see a simple and fair way in which to level the field, so to speak.

If I see enough interest in this idea, I will personally spearhead the movement to bring a petition to LL's attention. This situation sucks for all of us !

They can't afford to do it Steve. They'd have to increase costs for everyone and that wouldn't be fair. I think Europeans are just going to have to largely concede in the land game.

Apparently however we can bid for L$ land auctions without incurring VAT. So maybe when the land auction system properly kicks in, we can save a little cash that way.

will be "fixed"

I asked Zee about L$ auctions at the town hall meeting and he said VAT wasn't applicable as we were buying from another resident. Not at all sure how it works.

Strange though have you noticed .....that this VAT thing raised its ugly head after LL got into bed with Ebay for its land auctions .... and Ebay have just started with the VAT thing too.

Um, no, I don't think I should have to pay more because the Europeans pay VAT. I feel for them and all, but their overtaxed society is not my problem. They reap the benefits of their taxes every day with their free health care and long vacations and assorted government services.

Besides, that type of socialist thinking is not the American capitalist way. Don't think it will fly.

As far as this situation sucking for all of us - no, it really only sucks for Americans who are trying to make money off the Europeans, and they're leaving and taking their business with them.

Go ahead and flame me for not being a socialist, folks. I'm not uncaring and heartless - I just don't see why I should subsidize the EU's taxes.

I'm European, and I don't want a helping hand at the expense of people from elsewhere - after all, it's not Americans (or anybody elses) fault we get taxed.

I would rather the situation was a level playing field for everybody, but we do have higher taxation in the EU for various reasons. Expecting an American company to pay our taxes through a levy on everybody, just to fund the programs paid for through taxation in the EU would be grossly unfair.

I'll withdraw the idea now. I do think the VAT is going to hurt all of us in SL, long term. Some European residents have quit or are qoing to quit. Competition will be radically reduced in land. The variety of cultures here will be reduced. The amount of creative energy here will be reduced.

I guess there is no minimally popular way to solve this. Perhaps the EU eventually can create a special tax exemption for SL. One can dream, I suppose. Or for virtual worlds.

I don't think it's possible as the VAT is on the transaction - the purchaser has to be charged the VAT, which is collected by the vendor and paid to the taxman. The vendor LL, as a VAT-registered business, would be able to reclaim their VAT payments for things they purchase.

We Europeans live with VAT - it's basically just a sales tax, something most countries have in one form or another.

Just for your (and others') information Xi, our health care is not free. We pay for it through something called National Health Service Contributions which are taken directly from our salary before we get it, and our employers contribute a share too. Just so you know.

regards
imogen.

Actually, the seller is free to collect the VAT however they like, as it's technically a tax on them based on their sales, not on their customers based on their purchases.

Not quite, as many Europeans will raise their prices (in the American capitalist way) to cover their increased tier costs, people who aren't liable for VAT will indeed be paying for it.

When the EU invented the regime of taxing foreign vendors selling into the EU they were thinking about traditional sales (booksellers, SW vendors, etc.). I am quite sure they never envisioned a company (LL) providing a service to the whole world which facilitates private citizens (which are generally not eligible for deducting VAT across Europe) to deal with each other.

The unfortunate consequence of applying a law to a case it hasn't been designed for now causes the playing field to be slanted between EU and non-EU citizens, mainly noticeable through tier fees (i.e. holding land).

Yes, the current situation is unfair. But it also would be unfair to have non-Europeans pay for Europe's tax folly.

Bottom line: VAT sucks, but as things stand, somebody has to pay it. And no option is really fair.

Which is perfectly proper way to do it. Any RL business would do the same, costs increase, the costs are passed down. This will affect us all in some way. We'll just have to see how it shakes out. There is no other viable way to fix it

Increasing cost to EVERYONE to help carry the weight will cause MUCH more uproar then just letting them pay what their greedy government wants.

LL did infact do a bad job, once again, with relaying it to us. But the money is not going into LL`s pocket Raising a fee gridwide/introducing a new fee, that would make ppl not even in the EU carry the pain of EU citizens is just asking for a sht load of trouble and angry people.

I was pissed when they introduced VAT the way they did, and i`m an american citizen. If they announced I had to help pay VAT id be 5 times more upset.

Indeed Brenda, and I'm sure LL do the same with any corporate taxes, or any other taxes they incur when they have to pay.

With the average belief that all Europeans now have to pay upto 20% more than Non Europeans it sounds like a big increase.

So what was the increase in real terms?

Working on an average of 18%, UK pays slightly less, German pays slightly more, I have listed roughly what the increases are, these are by no means exact just an approximate guidance.

Membership
Monthly $9.95 =$1.80 increase less than a Pound, just over a Euro.
Quarterley $22.50 = $4.05 increase just over 2 Pound just under 3 Euros.
Yearly $72.00 = $12.96 increase just under 7 Pound around 10 Euros

To save money here, the obvious solution is for members that are in this for the long term is to change their membership plans from monthly to quartely etc, then the increase would not be so much of a burden.

Tier

512sqm $5.00 = $0.90 increase 50 Pence 65 Cents/Euro
1024sqm $8.00 = $1.44 increase of 75 pence 1.05 Euro
2048sqm $15.00 = $2.70 increase 1.35 pounds 2.00 Euro
4096sqm $25.00 = $4.50 increase 2.27 pounds 3.30 Euro
8192sqm $40.00 = $7.20 increase 3.63 pounds 5.30 Euro
16384sqm $75.00 = $13.50 increase 6.80 pounds 10 Euro
32768sqm $125.00 = $22.50 increase 11.35 pounds 16.65 Euro
65536sqm $195.00 =$35.10 increase 17.70 pounds 26 Euro
Island $295.00 =$53.10 increase 26.80 pounds 39.30 Euro


So, are the increases for the average user significant enough to have such an impact on the SL community?

IMHO, No!, subject to what is considered as the average user.

It obviously affects all in different ways, but it is especially relevant to those in the rental business. This is of course not a 17.5% reduction in profit, this is a 17.5% increase on outgoings. If someone is collecting, say, US$395 in rent on their sim, they were making a US$100 profit after tier. With VAT the tier increases to US$346, and so a 17.5% increase in tier costs results in drop in profit of over 50%. And of course a landlord/lady can't simply raise prices to cover it, because they will see their residents jump ship to a more compeitively priced alternative. So although 15-25% doesn't sound much, it does have a larger impact than the percentage suggests.

The situation is not so grave for other businesses and those who are not involved in business. I am in no way suggesting that the price incrase as a result of VAT 'hurts' them any less, but with the rental business, the VAT is more black and white: for most, it's the difference between a business running or not.

I would argue on the other hand why prices could not be increased. There are no set rules or guidelines dictating what land rentals should cost. It really lies at the hands of the owner to price his/her land accordingly.

For an Island the VAT increase converted to Lindens is approximately L$0.21sqm and for mainland L$0.14sqm.

The market dictates the prices.

Slight differences set in the prices of content is not so easliy comparable, as you would expect that content to be sufficiently different to other content to make it difficult to make direct comparisons. Of course it differs to varying degrees from one creator to another, and from one content type to another, but the general argument is still sound. It's not so straight forward for land rentals. If a resident is faced with one landlord/lady pricing the rental of that sim at US$450/mnth to cover VAT, and another resident pricing an identical sim at US$395/mnth, which do you think they will go for?

Of course there *is* some variation in prices landlords/ladies offer, but in general a business is going to struggle if their prices are above the mean.

I am heading off to my RL job now to make RL money to pay my RL expenses as well as pay for my SL addiction. For those of you who actually earn a living in SL, power to you. But please why are you trying to make this game/world more expensive for everyone else.

Obviously the VAT is unpleasant for the EU SL business people and it will effect all SL residents who engage in commerce in some form. But what will be your reaction be the next time some government decides to tax their citizens for things they do in here? Honestly I think we should not pay things like VATs for our virtual world. But for those people who actually make and draw RL money out of SL, you can bet a wager on Brenda's panties (or mine LOL) that they should be paying their income tax on their SL earnings.

SL is supposed to be about having fun in this virtual world. But I am afraid the pursuit of the almighty dollar here is making it not so much fun lately. I am off to work now, where my employer has blocked all SL access (including these forums) from the computer they give me access to. Imagine that, an employer paying me RL money to do work for them under the assumption that I will not be wasting their time in this virtual world of ours. No doubt someone will flame me because I do not take SL as serious as they do and that they feel I need to pay more so that they get to exist in this world and not deal with the real one out there. Have fun ... I will check back later, assuming I even remember what thread I posted in.

Well, "folly" is a strong word to use when, as you say, no legislator ever had in mind anything like SL. The problem is, that SL is, after a fashion, a game, and this is spoiling it. It's like playing Monopoly with the rule that left-handed players pay 20% extra on everything.

Which is why a level playing field would be desirable for everyone.

Ambidextrous for the win