- My account got the updated info on 27th.
- Next payment day: 27th.
- Mail arrived a few hours after it was added.
- They charged the sum at 27th (local day 28th).

So where has the warning been there? They needed time to set all up and to negotioate with tax authorities. So why not inform us earlier? The tax rules apply since july 2003. And according to business sites in US it is known there, too.

They charged for next billing day. If the billing has been done already, people have up to 30 days warning. if they have the “luck” to have the billing day at 27th or a few days later only, there has been no warning.

This also means: those having the billing date like me, pay for about one month more tax than those having had the billing day 1 day before they applied it.

And yes, I want an answer from LL, why they did it without warning, and I want to know, if the original price was without california tax or inclusive (the web page does not tell that).

But what would a warning have helped at least? I could consider to quit SL. But that will make me loose all land which was bought by me and all my inventory.
Even if I had “bought” a sim, I would get nothing from the “buy” price back which makes the “buy” price turn out as a much too high setup fee that way. If people really could “buy” the regions, they would get money back, when giving the region back to SL. But region owners get no refund and the region gets sold again for same price.

For what LL wants now from Europeans a month you can get a fully managed server with software (dedicated machine) in a data center (managed means: you call and they repair any fault within one day normally) without having to pay nearly 2000 $ setup fee in addition. LL can only do that because they have a monopol on what they are providing.

It is not the VAT at all, what annoys me again so much. It is that they show us all the time: you are good for bringing content, you are good for paying us, but please stay away from us with complaints about missing customer service.

In effect, they are not complying to a bunch of business laws.

In fact, these crimes are SO SERIOUS that it could even mean recovery after prosecution will take years and years.

I see what you are getting at, but it isnt a factor according to the website link i gave earlier.

What *is* likely to be a factor is what i alluded to earlier – by “importing” the imagery and facility to interact on SL from *any* server into your home, it seems the taxman has decided the place of supply becomes liable for VAT, even if based outside the EU.

Even though the link is tenuous to say the least, (aimed more at website hosting companies etc), LL’s advisors seem to have decided that SL belongs to the VAT category referred to as “Non-EU businesses supplying electronically supplied services to EU customers”.

I dont believe in knee-jerk reactions, but I think the whole affair has been cynically and poorly handled by LL. Not that I expect them to give one whit.

For the first time ever – I’m pondering whether SL is worth all the grief…….and money.

I think your post was well thought out. However you’re missing one key item: LL is having servers put up in the UK from what I’ve heard of this matter. I’m not tax expert in the US (let alone EU) but it seems like that will have bearing on the issue.

For the average SL resident, this is clearly absurd and would probably result in a SL resident being laughed out of the office by the taxman.

Linked to this, it’ll be interesting to see if LL incorporate VAT into the advertised price, which is quite definitely a legal requirement.

(I suspect they will argue we arent customers but participants in a business transaction, which will exempt LL from this requirement. but that of course, would contradict the probable view of the taxman, who would most likely NOT view taking out a premium SL membership as a business transaction)

1. Prokofy, I’m saddened by your uncalled for and frankly offensive remarks about “knuckleheaded Europeans” and all the vile baggage surrounding that remark. All so unnecessary & my opinion of you has fallen considerably as a result.

2. A great deal is being spouted by proponents and antagonists over this VAT issue. Most is well-intended but ill-founded and misleading. (Some, like Prokofy, are simply venting subjectively with no intent to illuminate).

I’m fairly certain it will take a genuine tax lawyer to unravel all of this fairly, but my instinct and experience in UK business tells me there is something deeply flawed in LL’s grasp of EU tax law, no matter how many tax experts they claim to have consulted.

For now, I will point out that, according to HM Revenue and Custom’s own website and the very helpful advice centre assistant i spoke to, the question of whether or not VAT is payable on services is initially governed by one simple rule:

Where is “The Place of Supply” of the service?

If outwith the UK and EU, then HM Reference Notice 741 clearly states that if supply is made from outside the EC it is therefore not liable to VAT in any member State (although local taxes may apply). Such supplies are said to be “outside the scope” of both UK and EC VAT

Tax law of course is never simple, so it could be that one of LL’s advisers has argued that by accessing SL from a UK-based pc, the place of supply then becomes the UK.

However, I’ll leave the final word to the Advice Centre assistant, who, while struggling to remain composed and professional, amusedly expressed the view that, although membership of a virtual community is a new phenomenon, that “somebody would seem to have gotten their wires crossed” & would be advised to clarify their actions before inadvertently breaking UK law. (this comment was specifically in reference to charging VAT on premium membership).

(For anyone brave enough to delve into the mire, I’ve included the url for Notice 741)

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000346&propertyType=document

I’ve felt for a long time that SL would be much better if the financial angle was muted a bit so people more interested in actual creativity over profit could have more room to breathe!

It looks like it’s happening!

But yeah, I really hate that LL made those EU VAT laws. Oh wait…

Linden Labs are suddenly asking Europeans for an extra 15% to 25 % for sim rental. This cuts directly into profits and it doesn’t matter if the rise is due to VAT or something else.

I don’t know how many business can survive having to make an additional 15 to 25% in 4 weeks when they were unprepared for it.

And you dont pay VAT on : • selling, leasing and letting land and buildings

So if you sell for like 30 mill Linden a yare in items you may VAT reg,,lol

advertised without and the VAT inclusive price underneath is also illegal – yes I know PC companies do it, so shop them.

So LL had better change their subs and advertising if they want to charge VAT and advertise services in the UK & Europe.

Global economy?

My arse…..