Is my reasoning sound? or WWJD?

[Marcury Jie]

Hi all,

I own a nice piece of the mainland with unblockable views and beach access, I like it. The parcel is 4368M² with 1500 land impact and I am paying the US$22 a month tier, I'm a Europen resident, so I also pay VAT on this, making it about $26.40 a month, plus I pay premium membership of $72 annually. This is currently $388.80 a year. ouch right? I have looked at selling it and renting somewhere else, I have looked at selling parts of it to make my tier smaller.

My latest thought is to create 2 alts with premium membership, therefore paying $72 x 3 = $216 annually. With myself and the 2 alts forming a group and each contributing our premium bonus of 1024M², making it 3072M² plus the 10% group land bonus, I should end up with 3379M². With myself and the 2 alts receiving our weekly L$300 stipend, making it L$900 a week, this should be  L$46,800 per year, which translates roughly to US$187 which can go towards paying my premium membership. Obviously I'd sell off or abandon the 989M² excess land I'd need to get rid of to achieve these numbers.

Here's where you come in. Am I right in thinking all of this? I don't think I do, but do I pay VAT on premium membership? Can I create 2 alts and do this? would they get the L$300 weekly stipend like I'm assuming? Am I breaking any rules? What should I look out for?

I'd love to hear your thoughts on my reasoning and also thoughts on what you might do instead.

Thanks in advance

[Ethan Paslong]

you'r totally free to create alts  and make them premium and use the free tier level for a donation to a group.

They will get the weekly stipends as every other, for LL alts have the same accountstatus as any other player.

[Lillith Hapmouche]

1 hour ago, Marcury Jie said:

I don't think I do, but do I pay VAT on premium membership? Can I create 2 alts and do this? would they get the L$300 weekly stipend like I'm assuming? Am I breaking any rules? What should I look out for?

• Yes, you do pay VAT, also on any extra tier stage of land use fees. 
• Yes, you can, and you'll pay VAT for each of them.
• They would, yeah.
• Nope.
• Cheaper options like renting tier from a third party. Might still be a better offer for Euros...

Edited April 16, 2018 by Lillith Hapmouche
See below.

[Marcury Jie]

Hi Lillith again, you answered me the other day.

I've just checked my paypal account and I only paid $72 for my membership, no VAT. I can't seem to find anything saying that premium membership is subject to VAT, if you know otherwise, I'd appreciate hearing it as this will dent my plans substantially.

... and once again thanks for your help in replying, as with Ethan

[Ethan Paslong]

15 minutes ago, Marcury Jie said:

I've just checked my paypal account and I only paid $72 for my membership, no VAT

there's no VAT applied to membership plans,  that changed in 2015 if i'm not wrong, before that VAT also applied to the membershipfees.

landholdings AND buying a sim from LL are not free of VAT.

http://secondlife.com/corporate/pricing.php

Edited April 16, 2018 by Ethan Paslong

[Lillith Hapmouche]

Interesting... I always took the "Value Added Tax", which is shown on the Account History summary page, as part of the membership fee.

In the downloadable detailed PDF, it does say, "Adding 19.0000% VAT (Germany) for "Recurring Mainland Fees" charge of $40" ... say what.

And yeah, I suck at maths.

[So Whimsy]

8 minutes ago, Lillith Hapmouche said:

Interesting... I always took the "Value Added Tax", which is shown on the Account History summary page, as part of the membership fee.

In the downloadable detailed PDF, it does say, "Adding 19.0000% VAT (Germany) for "Recurring Mainland Fees" charge of $40" ... say what.

And yeah, I suck at maths.

You see that because that's your tier payment, and that they charge VAT for.

What are the items for which Linden Lab charges VAT?

Anything that you pay Linden Lab for will have VAT applied. This includes:

• Purchases from the Land Store
• Land use fees (tier)
• Private Region fees
• Land auctions
• LindeX™ transaction fees

For more details see our Pricing List

https://secondlife.com/corporate/vat.php

 

For the premium membership itself they don't do that. Don't ask me how they can simply suddenly say 'Hey guys, we no longer charge VAT for this' because they don't make the VAT laws *shrug*

 

 

[LittleMe Jewell]

8 hours ago, Ethan Paslong said:

you'r totally free to create alts  and make them premium and use the free tier level for a donation to a group.

They will get the weekly stipends as every other, for LL alts have the same accountstatus as any other player.

I currently have 6 Premium alt accounts plus myself that belong to my land group, all donating their 1024 sqm tier.  IF I actually saved up all of the stipends and cashed them out to pay for the Premium fees (all on yearly renewal), then my total cost for my 8192 sqm of land would be $132 / year. 

Here's my math -- note that I am in the US and thus do not have any VAT on the extra tier that I pay.

  Calculated in US$
  -- Assuming an exchange rate of L$250 per US $1 -- the rate goes up and down, this is a good average
  -- The current fee to sell L$ is 3.5%

Stipend of L$300/wk x 52 wks = L$15,600/yr, sold at L$250 per $1 = $62.40 - 3.5% (2.18) = $60.22
  Round the above to US $60 for simplicity

One premium @ 72.00/yr - $60.00 = $12/yr net cost

The seven premiums supply 7168 sqm of tier.  Because that 7168 is donated to a group, the group gets an extra 716 sqm bonus.  For my 8192 sqm of land, that left me with only having to pay for a single 512 sqm of tier each month -- which is $4 per month, thus $48 / year.

Seven premiums at $12 net cost per year = $84 -- plus the $48 / year for the tier comes to a toal of $132.00 / year.

 

The above math assumes that you are good and do not spend your stipends and you cash them out to pay for you premium fees.  Now, reality is that I spend "my" stipend, but I do save almost all of the stipend for the alt accounts.  Thus it actually costs me the $132 plus the $60 that I could have saved by cashing out my stipends plus a tad more because a few of my alts will sometimes spend a little money.

Per the above math, I could add another premium (and might) and that would reduce the cost to $96.00 / year (plus the $60 for me because I don't save my stipends) with some extra tier left over and no monthly tier fee.

Edited April 17, 2018 by LittleMe Jewell

[Marcury Jie]

Thanks for the reply MIss Jewell,

your maths was pretty much what I came up with as well. It's actually interesting looking at it like this, it makes Premium seem quite good value, especially with the new land bonus. It's also good to see someone who's done exactly what it is I am thinking of doing, makes me feel a lot less hesitant.

In fact, I think I'll create 3 alts all with premium, which will bring my annual fees to $288 but that will give me access to 4505M², which will allow me to keep my full parcel of 4368M². With 4 lots of stipend, that should be about $250, making my premium fees only about $40, I know I haven't factored in little bits of commission but as a general that should be about it. Considering I was paying $388.80 for the same parcel, to bring it down to $40 will be monumental for me. Would it be ok to contact you directly if I get stuck with any of the logistics? I hope I'll be ok with it but if there are any things that confuse me, it would be nice to talk to someone who knows what they're doing.

Thanks once again one and all.

[LittleMe Jewell]

3 hours ago, Marcury Jie said:

 Would it be ok to contact you directly if I get stuck with any of the logistics? I hope I'll be ok with it but if there are any things that confuse me, it would be nice to talk to someone who knows what they're doing.

Feel free to contact me anytime.  Warning, even if I'm showing online inworld, I could be AFK for extended periods of time, especially on the weekends.  I will eventually reply back though.  Forum PMs can sometimes take me a few hours to answer also, especially during the work day.