Dixie Barbosa

One more quick comment: if you would like to talk more about this, I'm game. Feel free to IM me inworld: dixie.barbosa. Dutch or English is fine with me, so is voice or typing (your choice).

Hi Senzation, I completely uderstand your question and I've seen this issue before. As a bookkeeper, I have some professional interest in this matter (I know, I'm a nerd LOL), so here comes my 50 cents. As for income tax: is it necessary to have a real business? If it's no more than a bit of pocket money, I wouldn't worry about it at all. If it's more than that, but not enough to go all formal, put it on your IB tax form as 'inkomsten uit overige werkzaamheden'. If you do this, you can use your regular tax form (or software) and you can still deduct costs. If you have a sizable income and spend a sizable amount of hours on your business (at least 1225 hours per year), it's time to think about that KvK registration. As for VAT (BTW in the Netherlands, at a rate of 21%), this is where I'm not sure. It all depends on the question: who is my customer? If Linden Lab is considered to be the customer (because at the time you're taking it out of SL, they are the person to deal with), you don't have to pay VAT. If every single avatar/account is considered to be your customer, there's a serious issue. Under the new rules (as per January 2015) you have to add VAT according to where your customer is. But LL doesn't reveal this info, so there's no way to do this. I'm stating this, because you said that you talked to another Dutch designer who said she pays 30+21%. That 21% has to be VAT/BTW, can't imagine that being income tax. But that can't be right. The only way I see this happening is if she has to pay 21% VAT and 30% income tax. But then again, the VAT would lower her taxable income, so the 30% would be calculated on a lower amount. Effectively this would actually be 21% VAT and 23.7% Income Tax, so effectively 44.7%. Still high though. I would love to get in touch with that Dutch designer. Are you willing to share the avatar name with me so I can ask her if she's willing to talk to me for a bit? Or would you be willing to ask her if she can IM me? As for USA IRS tax forms: I got triggerd for taking out money and had to fill out that form. Easy peasy, no harm done. I talked to LL and they said that it's not a problem at all and just a way for them to get out of having to deal with all kinds of US based taxes for foreign people. The trouble starts if you have any kind of fysical representation in the US. And opening a bank account there, in your name, might trigger a bunch of questions in that direction. Worst case is that you would have to charge Sales Tax, pay Federal, State and Local income tax (and file them all separately), etc. All in all I agree with Ethan. Look at the amounts and make a decision. Serious enough to call it a real income? Do something with it. Otherwise let it go. One other thing: If you take it out through paypal, you can also not do the last step to transfer it to a Dutch bank account, and just use it (from paypal) to pay for RL things. Start searching for stores where you can pay with paypal. I hope this helps. Best regards, hartelijke groet, Dix