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Sassy Romano

End of VAT

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I'm curious as to the latest blog post:-

"We will also no longer charge VAT for Premium subscriptions. If you live in a region where VAT applies, this means an effective savings in some countries of more than 20% below what you would have previously paid!"

So do tell LL, what changes are now in place in your accounting that make you except from collecting VAT to EU member states?  I can't find anything that has changed other than you can now delcare one EU member state with which to register and collect VAT and they will divy out the proportion to where the end customer resides.

If you've changed to not charge VAT now, why did you collect it in the first place if you feel you have a different view?

(I know, I know, I won't get an answer but i'm still curious)

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It means that LL has decided to subsidise users from countries which charge VAT. They can not avoid handing the relevant monies over to the appropriate fiscal authorities, so they are effectively giving a discount, thereby discriminating against those, such as US citizens, who are not affected by such a taxation regime.

How do you feel about that, you 75% of LL customers who are paying more than the subsidised 25%?

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Subscriptions are still subject to VAT, and HMRC are going to continue to collect their 20%.   It's just that LL are absorbing the cost.  

I wish they'd do it with tier, too!   They won't, of course, since it would be far too expensive, but that doesn't stop me wishing they would!

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Precisely, their wording is incorrect, they are STILL charging VAT but discounting the subscription.  Different thing.   Their statement that they are not charging VAT is wrong.

Hugh, please can you cite the source of your statistic that 25% of the user base is EU.

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How do you feel about that, you 75% of LL customers who are paying more than the subsidised 25%?

they don't pay more, it's the same price for everybody

only LL will get less income.

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Indeed. After all, Liz Saxe-Coburg and her brood need the money; those palaces are simply too expensive to maintain out of her millions, so far better the poor 'subjects'  pay....whether they want to (the dozy, brainwashed since childhood schooldays and news in adulthood) or not (the enlightened minority).

It is high time LL gave something back, as they have made eye watering amounts from rent...which is what tier is. Reframing a word that everyone knows ...'rent'.....to a nondescript word like 'tier'..is, of course, capitalism at it's worse. 

The scam that was pulled, I suspect even the more senior Lindens were dubious about their accoutants managing to pull off, ie charging rent on land that is, erm, sold.

Try it in the RL and watch how quick you appear in court. :o)

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When you buy land in RL you have to pay property taxes on it.  Property tax is used to keep your local government running.  Tier is no different.  It is used to keep the servers running and pay the staff.  .  So tier is more of a tax that LL imposes rather than rent.  Also many times the purchase price of land is not paid to LL but to the prior owner.  The only income LL gets then is the tier.

While most people,including myself,  think it should be a lot less than it is, there will always be tier  You mistake LL as a charity rather than a business.  As with everything else, if you don't want to pay tier, don't buy land.  You don't have to have land to use SL.

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HughJegow wrote:

It means that LL has decided to subsidise users from countries which charge VAT. They can not avoid handing the relevant monies over to the appropriate fiscal authorities, so they are effectively giving a discount, thereby discriminating against those, such as US citizens, who are not affected by such a taxation regime.

How do you feel about that, you 75% of LL customers who are paying more than the subsidised 25%?

 

VAT is a tax the Europeans impose on them selves.  When will the rest of us receive a subsidy from LL toward our taxes?

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Two posters now have reference the same thing, that I really do not understand. The new policy of LL to not collect VAT from European Residents is NOT subsidising them in any way. Up to this moment European Residents paid up to 20% more for tier than the rest, now they will pay the same dollar amount as everyone else. All this does is bring the playing field a bit more into balance from a business perspective, completely levels it in respect to residents from Non-European/Non-US countries, and nearly levels in respect to US residents (still have exchange rate fluctuation).

 

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Amethyst Jetaime wrote


 

VAT is a tax the Europeans impose on them selves.  When will the rest of us receive a subsidy from LL toward our taxes?

we still have our normal taxes as you .... there is no subsidy ... we pay the same as you. It will mean we can finally do the same as non EU residents without paying 20% more than you.

Most likely LL counts on a increase of at least 20% more income to compensate the part they have to pay to the EU tax offices.

(if it's ever paid... nobody can check that)

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Amethyst Jetaime wrote:

VAT is a tax the Europeans impose on them selves.  When will the rest of us receive a subsidy from LL toward our taxes?

correct

LL should charge people $US7.92 and then if they (LL) want to pay the EU VAT taxes for their customers on top of that then they can 

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irihapeti wrote:

LL should charge people $US7.92 and then if they (LL) want to pay the EU VAT taxes for their customers on top of that then they can 


they do....sighs......

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Wandering Soulstar wrote:

 All this does is bring the playing field a bit more into balance from a business perspective, completely levels it in respect to residents from Non-European/Non-US countries, and nearly levels in respect to US residents

 

incorrect

from a business perspective then any VAT that LL invoice you for, then your business can offset this against any VAT that you invoice your own customers for

unless you not invoicing your customers for VAT. if not then you not running a business. You just a consumer, same as everyone else who dont run any business

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Alwin Alcott wrote:


irihapeti wrote:

LL should charge people $US7.92 and then if they (LL) want to pay the EU VAT taxes for their customers on top of that then they can 


they do....sighs......

yes thats the price EU people now pay for the 1 month premium. $7.92

everybody else now pays $9.50 

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irihapeti wrote:


Wandering Soulstar wrote:

 All this does is bring the playing field a bit more into balance from a business perspective, completely levels it in respect to residents from Non-European/Non-US countries, and nearly levels in respect to US residents

 

incorrect

from a business perspective then any VAT that LL invoice you for, then your business can offset this against any VAT that you invoice your own customers for

unless you not invoicing your customers for VAT. if not then you not running a business. You just a consumer, same as everyone else who dont run any business

ONLY if the person paying VAT is VAT registered AND the cost of SL is related to the business and customers of this business would only pay VAT in SL if the output of the service was a real world good or service.  Example creating a mesh object and selling it for € or whatever local currency.

What would you like to do next, claim a VAT mileage allowance based upon use of an SL car? :)

Also, you appear to have missed the point.  LL haven't said they are reducing the price that the customer pays by 20% so your claim of $7.92 is invalid.  That may be the amount that LL will take in revenue but the end customer will still pay the extra 20% VAT on top just that LL are marketing it as not being paid.  It IS being paid.

Everybody will pay $9.50 (or as appropriate depending on subscription taken)

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but 

i add more (:

+

is $7.92 whichever way you look at it

bc the $1.58 isnt paid by LL. LL are not the taxpayer. LL are the tax collector. The $1.58 isnt LLs to do with as it pleases. It dont belong to LL. The tax money belongs to their customer. The customer is liable to pay it. LL is only liable to collect it and pass it on to the taxman

 

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irihapeti wrote:

is incorrect from a business pov

Care to state why you believe that?  Refuting a complete post without stating why is somewhat lame.

I'll state it again, a business can reclaim VAT from inputs where the input good or service relates to the business in whole or in part and where it's in part, there will be a percentage claim of the VAT, not the whole amount.  That's it, you cannot just claim VAT on a fridge for example where that fridge lives in your home and is wholly unrelated to the business.  Nor can you charge VAT on outputs which are a) not related to the business and you certainly won't charge VAT on transactions inside SL.

If you think you can, then I suggest you seek better tax advice!

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irihapeti wrote:

but 

i add more (:

+

is $7.92 whichever way you look at it

bc the $1.58 isnt paid by LL. LL are not the taxpayer. LL are the tax collector. The $1.58 isnt LLs to do with as it pleases. It dont belong to LL. The tax money belongs to their customer. The customer is liable to pay it. LL is only liable to collect it and pass it on to the taxman

 

In this part you are correct, LL are the tax collector and they will collect $9.50 from the customer so all customers are paying the same $9.50.  LL then pay the $1.58 to the tax authority.  It's not difficult is it?!

What's incorrect is LL's choice of words saying that the VAT is not charged.  It IS.  It's just that the base subscription has been lowered such that the overall price is the same.  LL cannot chose to NOT charge it, in that we agree.

However, this is no different from sales that you see on the high street "VAT free weekend sale".  It's not correct.  It should say "20% off sale".

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Sassy Romano wrote:


irihapeti wrote:

is incorrect from a business pov

Care to state why you believe that?  Refuting a complete post without stating why is somewhat lame.

I'll state it again, a business can reclaim VAT from inputs where the input good or service relates to the business in whole or in part and where it's in part, there will be a percentage claim of the VAT, not the whole amount.  That's it, you cannot just claim VAT on a fridge for example where that fridge lives in your home and is wholly unrelated to the business.  Nor can you charge VAT on outputs which are a) not related to the business and you certainly won't charge VAT on transactions inside SL.

If you think you can, then I suggest you seek better tax advice!

read again what Wandering wrote which I quoted

i said was incorrect that Wandering's view that this action by LL 'levels' things up between a EU businessperson and a US businessperson

It dont

a cost of doing business for a SL premium US person went down from $10 to $9.50 (reduced by 50c). A cost of doing business for a SL premium EU business person went down from $10.00 + VAT to $7.92 + VAT. (reduced by $2.08) 

 

 

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ONLY IF the VAT against SL is reclaimable and even then, it's still a level playing field because to be blunt, the saving if paid monthly is what, $24 over the year and less if paid annually.

Given that the present UK VAT registration threshold is £82,000 (~$126,000), if anyone feels that those $24 is giving a business advantage to a business where the real world revenue is in excess of $126,000 already needs to get a grip on business costs.

If the VAT were covered on tier by LL, then yes, it would be very easy to see an advantage for estates but it's not.

Real world business here is a completely different thing from what most consider an "SL business" where there is no VAT applied at the point of sale.

So the bottom line here is that the EU business person has over the year, saved the cost of a family of four in McD's except that the McD's in Europe is more expensive than the US so I guess that's so not fair lol.

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Sassy Romano wrote:

So the bottom line here is that the EU business person has over the year, saved the cost of a family of four in McD's except that the McD's in Europe is more expensive than the US so I guess that's so not fair lol.

jejeeje (:

but

this is SL. we are bizness people ok

like 4 big macs is still 4 big macs. and fries. and a big coke. or a chocolate shake if prefer that to a coke. for no extra cost

is pretty much our whole annual business entertainment budget spent in 1 go. So we dont want to waste it all on just any old body 

jejeeje (:

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ps

if i did get a $9.50 then I am supposed to get charged $9.50 incl. GST (which is 15%)

and if I was a baron then charged 15% on top of the tiers

and if I was a baron and had 17 sims, then I could claim all the GST paid back as a tax offset

my own taxman tho be quite interested in my invoicing arrangement with LL when I cash out

 

eta: tax offset. not expense

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I have recently paid premium for the next year... Rather annoying I think, because in my country we pay 25% tax, so if I have known, I would have changed my premium payment to a month at the time, and paid for a year later when it became taxfree.

Or, maybe this new thing is only for the new premium members, who sign up for the very first time?

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It's this title "Cheaper Monthly Premium & the End of VAT Charges" that is a bit confusing. They will no longer charge VAT for Premium subscriptions and that's it, it's only premium membership that is no longer charged. I just payed my monthly tier and it was still taxed with 21% VAT.

I already found it hard to believe that LL would end all VAT charges but I am disappointed nonetheless. :matte-motes-frown:

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