Great blog, Vint, congrats, yaaayy ! And this decision totally sucks, no doubt ! For final european consumers like me, the only option is… give up our lands and all our projects, quit shopping (don’t you think european designers will reflect this on their prices?) and… just relax and have fun !

Yeah i did…..was suprised. No warning or anything on lindenblog.

I pay land tier to Dreamland and not Linden…but that will probably go up too?

Thinking of dropping me premium account now lol.

Many ppl blogged this morning about the VAT e-mail.
I thought Lindens want more premium accounts not less.

Yes, I got that e-mail too: in the middle of the night and keeping it for a moment that I would be more awake ;-). And I do have a premium, so have bills from Linden’s.

After a night of sleep I can understand what I’m reading and I think it is ridiculous. When I pay VAT in my own land (Netherlands) I know my money is going to my own government. But I’m wondering where it is going when I pay it to LL? Their own pockets?

Besides that it must be a hell of job for LL to keep track of all the different tax rates in different countries, they’ll need employees to do that… and who’s going to pay them after all? I bet the residents with a paying account.

And there’s more: as far as I know (but I’m not an expert - not at all actually) there are different tax rates for different “products”. You pay less for service (I think 6 or 7%) than for assets (21%). I wonder what LL is going to charge me for my account.

And only for Europeans??? *frowns* There was something about equality of all residents, what was it again… (oh hubbie is saying that only Europeans have this way of paying taxes, that might explain)

Hey Vint. You asked about the rest of the world. This only applies to countries that are a part of the EU. Gwyenth Llewelyn at http://secondslog.blogspot.com/ did a great blog explaining the whole thing. Not an American thing. Sorry you are getting hit with this though. Take care.

I find it humorous that these Europeans who always advocate socialism and free lunches and short work weeks and such are now whining about the heavy taxation that of course was instituted to sustain all that socialism.

It’s a form of infantilism, this European dependency.

/me ignoring the typical PN off-topic rant….

LL is slow. Took them how long to figure out that gambling in SL would be illegal? And they are just now determining that, oh, maybe we were supposed to have European members paying VAT?

Are they making stuff up as they go?? They didn’t have a legal team in place from the get go to advise them about how online businesses work?? They could avoid all these last minute decisions if they knew what they were doing before implementing their product.

I definitely would not be happy if all of a sudden I had to start factoring VAT into my normal LL payments, how much is an average VAT rate these days, anyway? Bummer.

Sure would be nice if LL could make all their policies effective at once, instead of throwing something new at us each month.

The VAT they’re talking about is a EU tax. Other parts of the world don’t have it.

Remember when they moved billing to a 3rd party in I think the UK? LL doesn’t have to keep track of local taxes themselves, that’s for the billing company to do. My guess is either some european government agencies started asking about taxes or the billing company brought it up.

I’m interested in what gets banned. The rule seems to be things that would make a government forbid access. The US federal govt would block access for casinos, and much of Europe and Australia would do the same for images of avatars doing sexual ageplay.

http://secondslog.blogspot.com/

This article by Gwyneth Llewelyn covers the matter to the point.

In Sweden (and Denmark too I believe), VAT is 25%.

There was an incident a few months ago when Linden Labs shut down my account because I had logged on from the “wrong” IP (which proved to me that LL monitor all the users).

It just wasn’t the same afterwards. From having had a lot of fun, I suddenly felt like I was in East Germany.

This time I cancelled my account immediately. Enough is enough.

Yeah well … another European here who has to pay 19% more now. But Vint, do you seriously believe that LL is capable or even willing to communicate properly?? I mean, there is this far more intrusive identity verification thing, run by a dodgy company founded in 2007, about which LL still tells nothing substantial, other than that there might be even more intrusive identity verifications in the future? I don’t like ranting usually, but these people are just dictators who act like dictators do … so don’t be surprised …

Um, let me get this straight. These people are “dictators”? Because…they are complying eith YOUR European heavy taxation socialist laws? Mkay. And they are tyrants because…they are verifying age due to YOUR hysteria about child porn and YOUR laws? Right! Ok, then, got it!

Personally I work very hard at not paying ANY tax ANYWHERE. Hey, I’m Chinese. But it’s a bit difficult pointing a finger at the poor old Lindens for trying to stay on the right side of the law in multitudinous jurisdictions. Mind you, if I was you I’d strongly appreciate some confirmation that the funds so collected were actually applied to the taxes specified……

Well, way to go, Lindens! Though lucky me in Israel, we don’t pay the 17% VAT here for Linden services :-D If they start charging me VAT, the Lindens will never get an Israeli Linden Liaison in 4 years ;-).

P.S.: Hmm, perhaps VAT in Linden terms is:

Very Aggressive Terms,
Virtually Annoying Toads,
Very Awkward Ticks
Very Aggressive (customer) Tweaking

And feel free to suggest more… >.>

hopefully the basic accounts do not get taxed… yet… :-)

Maheegan: while you still have the viewer, maybe you could help me verify whether we have a texture download bug now in opensim, or not ? :-)

I love my basic account:
- It wont get vat’ed, as there no membership or tier payment
- It wont get dispended if LL can’t bill it for whutever reason (they don’t bill it at all)
- I can still own land if I want to, just not at LL

Couldn’t LL set up an European base?

You’re not getting the whole picture, Kean.

LL has a European base — offices in England. No doubt their need to register there and in Vienna I think it was where they were starting another new office (look at their blog for info) they faced this VAT thing seriously for the first time — they just hadn’t focused.

Having the European base is what is causing this problem; they wouldn’t have it likely to the same extent if there were no European operational base.

You can “own” land from land barons who can rent you islands or mainland, but now *they* will be paying VAT as part of their fees for tier and land purchases. And that means they have to pass along the costs to YOU as part of their greater expenses.

ahh… it is because they are in EU that we now need to pay tax, as for any other stuff we buy in EU. I see.

What about the US tax we allready pay then?

and what if I buy from and US or Chinese based landlord?

not exactly Kean. Quoting from Gwyneth Llewelyn’s blog:
“non-EU businesses providing digital electronic commerce and entertainment products and services to EU countries are also required to register with the tax authorities in the relevant EU member state, and to collect VAT on their sales at the appropriate rate, according to the location of the purchaser”

So LL is simply complying to EU-law. But it feels unfair anyway, because the effect is that end-users (like me) have to pay about 20% more for having a second life.

Yea… I understand that it has nothing to do with where LL is based apparently, and that LL should have charged VAT to all EU residents since 2003, and most users prolly thought that the VAT was included in the end price as is the norm.

But as I understand it I wont get charged VAT as long as:

1. I stay on basic membership
2. If I need land I only buy land inworld on private islands owned by US citizens. No VAT on inworld transactions user to user, right?

Still are we getting double VAT’ed? You do pay VAT in Cali no?

I think it was Andrew Linden who said they were not allowed to give “warnings” as soon as it was announced, they had to start charging.

Linden Labs also took a lot of advice, but it seems that their actions don’t comply with laws in Germany and in France.

Well, what they should do is, make the prices the “same”. Like so:

They would subtract the 20% off an island monthly cost (per Resident), and call it the regular price, and then adding the 20% as the VAT. So it won’t affect Residents.

Entitlement happy Euros trying to blame LL because their government is overtaxing them. Typical

Speaking as a dedicated tax evader, why not use a proxy server? Should fix the problem.

@John Barrett: Excuse me? I’m not a European, though I think LL should’ve given them a heads-up. Instead of saying it like so:

“Entitlement happy Euros trying to blame LL because their government is overtaxing them. Typical”

You could’ve said:

“I understand this is annoying, but LL had no choice. Its the government you should be after.”

Do you agree with me it sounds better and more friendly? Jeez.

@Bhelle: Well, it’s a little “risky”. These proxy IPs can be tracked easily, and owners of those proxies contacted by the FBI your local government. So, I don’t think it’s a very good idea to cheat ‘em :-/.

@Smiley: yeah. cheating is definitely not a good idea. If it’s law - it’s law. OTOH - assuming all the other services are complying with the law and have the VAT already included, then we the price has been all too high from the very beginning.

For not 20, but 14 bucks per month, I rent not a 512m2 of pixelspace, but a whole server. (Well, it’s a Xen VM, but still).

@Dalien: Lol, you mean, your OpenSim server? Or someone lent a server to you on the grid for 14 bucks a month?

@Smiley: nope, that’s another server that I have, for “small things” :-)
I did run opensim on it for some time, but the memory was not enough. I could’ve gotten a somewhat functional opensim host (assuming no intensive traffic) for around 40/month, though.

If I do not need the social networking capabilities, and find the pleasure in pure building, that would’ve been just about a damn good deal. And the best part of it would’ve been that I can grab all of my content and move it to any other PC.

@Dalien: Ah-huh. Nice! :-). I really need my own web host. Can you recommend me one that is low-priced, very responsive, has a high amount of bandwidth, lots of space, and always (99.99% will do) online?

I saw some pricing US$5 a month for 300GB, but they’ve got to be phishing. Email me some selections ;-).

It seems Vint didn’t see my “comment request” lol ‘^_^.

Smiley:

a quote from rfc1925:
Good, Fast, Cheap: Pick any two (you can’t have all three).

That said, the folks I’ve mentioned are unixshell.com - I get the box with root access, 6g disk space, 128m of RAM and 300gb of traffic included into this package. The new accounts operate through tektonic, which I think is just a brother of unixshell.

Maybe they’re not the cheapest, but the fact that in 6 years i needed to talk to them twice, is good enough for me to not search for anything else.
(and then, again - this is mostly for small personal stuff, not really running a business or anything).

@Vint: I put in a request to edit my comment, and placed two URLs with the words “hackish” and “url” so WordPress would keep it on moderation ;-).

@Dalien: Hmm, nice. Though I want something like, 50GB… For example, I was considering buying an iPod Video once, and thought of getting the 80GB version. I will never get to 80GB, yet still, to play it safe ;-).

The Lindens aren’t raising a price just for Europeans, that’s silly. They are adding the VAT that you Europeans require to sustain your socialism, it goes to your governments, not them. They’re required to include it — and that means *adding it* — in their price.

The reason the Lindens don’t charge California sales tax is because they are not required to by law. There isn’t tax on this sort of interstate Internet commerce, say, on amazon.com it works the same way. You can read up about this just by googling the terms. The major states have generally ruled not to try to collect this — or if they *do* have some statute requiring that stores, say, within California, collect tax just from California residents, they don’t enforce this — it would be complicated to enforce.

The VAT does not apply to resident-to-resident transactions in world. It helps to both read the letter the Lindens issued, and their web page on it.

I totally agree that this should have been announced properly with due notification. But the notice is for the next tier cycle, which is about as good as one can expect from the Lindens.

The Lindens are not a European company; they’re an American company, operating in the U.S. interstate context. So they don’t put prices that illustrate taxes for the U.S. — or for any other country. It would be absurd to expect that.

Now that they are registered in the US, and have a VAT registration number evidently, and have staff in the UK and plan more European offices, they have to pay VAT.

The Lindens are NOT applying the VAT to the *existing* billing period, but the NEXT one. Your bill is a bill that indicates the tier you indicate you will hold *for that next month* in addition to billing you at the highest level tier you hold. If it were billing you for *this* tier period it would instantly debit. Instead, it is a notice for your NEXT bill. Read the letter.

There’s a gem in here which refers directly back to my comment that it would be nice to have confirmation that they’d applied the money collected to paying VAT.
The point is that it’s a Value Added Tax, not a sales tax. It nets off if you add further value to the goods or services traded. You can get credited or refunded for tax payed on inputs if you add further value. For this you need to be able to produce a tax receipt or invoice if audited.
Now I’m no expert on European VAT but in most places there is a legal obligation on the person who collects VAT to provide a receipt. Serious penalties! Someone should point this out to the Lindens

The Lindens *do* provide a receipt. Navigate here:

As for your constant claiming about how VAT is different than sales tax, you’re completely missing the point that in the U.S., all businesses and individuals write off expenses on their income tax against their income. It’s called “deducations”. If they are taxed on their income from SL, they can show the costs involved in tier, etc. and thereby reduce that tax. Same principle.

Get it, Prokofy, bright-eyes? They HAVE to give a receipt.

And…so they do, bright-eyes!

There is no use whining about the fact that one has to pay VAT. That is part of how our social system works.

But anyway… remains the fact that by law, in the announced price the VAT MUST be included.. if not, as stated before, it is supposed to be…
It is not up to the customer to make the calculations.

So, if the Lindens, or their billing agency, think that by charging the VAT seperately, adding it to the announced price, they are complying with European or Belgian laws,… they are just breaking another one.

Again, there isn’t anything *more retarded* that this persistent belief that the Lindens cannot *add the VAT* and increase the price. There is nothing whatsoever illegal about this. In fact, like it or not, *it’s what they are doing* and surely they have better legal counsel than the opinion of a lot of amateur brats on a blog.

Anyway, if I’m wrong, and the Eurocrats shut you down because GASP the American company couldn’t keep subsidizing you, buh-bye, hope you find another game.

@Prokofy
I should neglect your comments, but I think you are only feeding any existing anti-american sentiments with the way you are flaming on Europeans *quotes: “I continue to be absolutely amazed at the ability of all these blahging Euros nattering..”* Who’s nattering?
But possibly that is exactly what you are after: dissension. I regret that.

And besides the question if LL are acting correctly or not, no matter if you are American, European, Asian or whatever: who wouldn’t be annoyed if he had to pay 20% more on his bills?

Zippora, I’m happy to be as shrill and as persistent on this as need be, to meet the shrillness and persistence on this from people like Veronique. Sorry, but that’s often required to get people to think straight and use some common sense and reason here.

And, apparently a lot of the problem here is that people are just ignorant about how to run businesses, because they’re amateurs. I’m told you can register a VAT company, collect VAT, declare expenses, and get it back. Now sure, that sounds complicated. But then, that’s what normal people do when they run businesses. It’s as if people imagine virtuality is supposed to rescue them from paperwork.

Vint, why don’t you just ban Mr. Neva? I mean, it’s pointless to discuss with him, he has no manners whatsoever, and it cannot be an accident that he’s banned on most SL forums, including the official one (which is, to the best of my knowledge, not run by Eurocrats). These constant personal insults are so much against most basic netiquette and common sense — please take it as a user statement, I don’t want to read anything from this guy here again.

“Digitale varer er toldfrie

Digitale varer – det kan være et computerprogram, som kan downloades via internettet – kaldes ”ydelser”. Sådanne ydelser, som du eksempelvis downloader fra internettet efter at have indtastet dit kreditkortnummer, er toldfrie. Også selv om du henter dem fra en internetserver uden for EU. Der skal dog fortsat som hovedregel betales moms af ydelsen. Det skal den udenlandske leverandør sørge for, når køber er en privatperson.”

According to Danish (EU) law is it the foreign supplier of a digital service that is responsible for paying VAT back to Denmark, when the end user is non-comercial. The end user is not the one responsible for calculating the VAT.

This is not a new thing… it has been like this since 2003. So if LL untill now has not payed 25% of any sales they made to me, they are the ones breaking the European law.

In reality all we see is an increase of the prices which of course is VAT included right?.

Um, the personal insults merely match the ones made against me. The skittishness about personal insults and nasty comments are never evident for those *other* people, eh? Take a look at what they write!

And if there is some law broken since 2003…why aren’t the Lindens long since sitting in handcuffs in a dungeon in Copenhagen?!

There is, as usual, again somebody who only reads what he/she wants to read, in order to start ,again, a sensless ranting campaign.
The blind leading the blind..

But, to state some facts again:

1) I have nothing against VAT.. partly it paid for my studies, social welfare etc.. so no whining..

2) Not everybody does business in SL… most are mere consumers.
For people like that, registration for VAT exemption would really be retarded. It involves RL costs and obligations, bookkeeping, etc..
For the average John and Jane Doe, who just are playing the SL game, and pay a premium to only have their 512m², the costs will be a multiple of the 21% VAT charged..

3) If you are selling to normal consumers (not registered for VAT exemption), like LL does, its not about if you can, or cannot add VAT to thre bills. They just have to do it.
But also they have to announce prices including VAT. That is not me shrilling, that is just the law..

So, if you put a price tag for your clients, showing that something costs 100, the client has to pay 100. This means that your company will get +/- 82.6, and that you have to pass the remaining 17.4 to the state..
Of course, as a seller you have all the rights in the world to earn 100, but then you HAVE to tell your customer that he has to pay 121 for the product he wants to purchase.. not 100.

The whole idea behind this, is to create transparancy for the small consumer. No surprises when settling the bill.

I am not begging for a price reduction for Europeans here.. just saying that if LL wants to comply with the European law, they should take care about complying with ALL laws.. and state how much theire service will cost us, VAT included.
One is supposed to assume that the announced price includes it.
And jurisdiction tends to protect the small ignorant consumer..

(they are allowed btw to show ADDITIONALY how much it costs when you can recuperate VAT, but only in a non-confusing way… clearly stating that it is without VAT, and, eg not in bigger sized characters then the full price)

**** OFF TOPIC

“Anyway, if I’m wrong, and the Eurocrats shut you down because GASP the American company couldn’t keep subsidizing you, buh-bye, hope you find another game.”

Funny words from the mouth/keyboard of the one who in many other occasions claims to defend the rights of the “small players” against the FIC, the big companies, the communists and what ever conspiracy exists in her paranoic mind…

But, I suppose, again it isnt about discussing the topic is it? But mostly about entering/ starting a controversy, venting anti-european frustrations, and, like a fungus, spreading your name around the blogosphere..

*** END OT

I suppose that LL either has payed VAT since 2003, or has just discovered that they should have.

If they pay, they dont need to go to jail.

Maybe that is why we now see a sudden rise in pricing? =)

Mr. Neva, very simple: before you started your … whatever it really is …. here, there was a friendly and fun atmosphere here, which is gone now in precisely those discussions where you participate. What a coincidence. But as this seemingly always happens once you engage somewhere, you might just consider it normal. I don’t.
And that’s all I have to say about this.

to be honest miss Kelly.. me too, I am wondering if all this “funny writing” you were quoting, isnt just one big insult to the address of mister Neva..

:-p

There is, as usual, again somebody who only reads what he/she wants to read, in order to start ,again, a sensless ranting campaign.

>Mr. Neva, very simple: before you started your … whatever it really is …. here, there was a friendly and fun atmosphere here, which is gone now in precisely those discussions where you participate. What a coincidence. But as this seemingly always happens once you engage somewhere, you might just consider it normal. I don’t.
And that’s all I have to say about this.

Gosh, girls, sorry to upset your teaparty! Please do go back to your fashion show!

When you run and profesional business there’s no need to whine. Nobody has asked LL to sell digital services to communist EU. So if LL don’t wanna pay VAT to EU they could simply stop selling to EU based end-users. It is really that simple.

:-)
So… we have somebody amongst us who, when asked to pay 100, pays 117.4… tell me again, who is the retarded here??

(btw: basic mathematics… 17.4 = 21% of 82.6 ; adding up 100
as 121 = 100 + 21%… but allknowing and with a broad education like you are Prock.. you knew that didnt you? Talking about the 17.4% adding to 100 was just a trick to see if we brads were awake in the classroom??)

And yes.. a lot is in the letter.. most of us can read.. problem is: it just came now.. not when they started.. so we all could, HAD to assume that VAT WAS included all these years.. Now, it seems just a raise in price..

I’d like to read your comments if one day LL discovers that they were neglecting the rules of .. lets say Alaska, because there is some internet related tax for the benefit of polar bears, and because of that they start charging extra… Will you defend them that day?
My guess.. if we (europeans and other ignorants) are in favor, you will fight it..
But if we will raise our voices.. you will back-up LL.

When will you admitt that there is only one topic for you Prock?:
putting your own pittyfull person in the spotlight??

And I think its more than a cup of latte for LL.