Paying VAT to Linden Labs!

Hi.

I am not averse to paying VAT, I have been paying it to our Customs and Excise since its inception.

I am not upset that other do pay VAT, and some others do Not pay VAT.

I am upset about the flaws in the way that you Implemented it.

The concept of simply bolting on VAT, like a gas station in Tampa Florida bolted on 25 cents during the building of the Buccaneers stadium, is reprehensible and plain wrong. It is only 'Right' if EVERY customer using the gas station gets charged the same 25 cents. To charge that tax to 'out of towners' is disproportionate and clearly wrong. Yet, I feel that is exactly what you are doing with VAT.

Bolting on the tax after the price has been agreed, and then applying it to only those from 'Out Of Town'! I hear your laughter, "Dang, thats a clever idea", but it is also illegal under our law and under your law, both constitutional as an instrument and socially as a directive.

Right now, my investment in dying on SL for a number of reasons, no more $4,000 USD a month from me because i cannot charge a tier to my customers that is financially attractive. I have had to sell three islands, so I effectively lost 12 customers who were paying $125 USD a month to enjoy peaceful land, no ad farms, residential, and 7 x 24 concierge service. Thats a drop of $1,500 USD coming into your income stream each month. I know that may not be very much in your global economy.

Let me share why VAT and its poor implementation is losing customers at such an alarming rate.

The American island owner needs customers. EU islands owner needs customers.

The EU island owner, if they want to work with no profit, might elect to charge just tier for their island residents, and lets say they have one resident wanting that island. I could charge that resident $295 USD plus another 17.5% to cover my VAT payment to you. The American player, knowing I am unfairly handicapped by having to pay VAT, charges $295 USD for the same island, and 5% for a slim profit margin. You can see where the customer will go to.

That is what I have complained about so many times and I have called it a non level playing field. (search my entries for River Ely to confirm).


If you wanted to do it fairly, so that none of your customers were disadvantaged, you could have implemented it in a manner called VAT-INC, or VAT Inclusive.
This means, the same end price goes to all your customers, be they EU or USA, ie $295 USD. However, it means you get to keep more of the USA players $295 than you keep of the EU Players $295. ( multiply by 1.175 I think) You deduct from the EU players $295 the correct proportion of VAT and pay that to the UH HMRC. Simple. Now, all your players are on a level playing field and have to charge the customers the same to break even, so there is no advantage to being in the US, UK or anywhere else.

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Let me clear up something I would like you to share with the USA players that do not understand VAT and please explain to some of your live help concierge who also do not understand how VAT works. If you are aware of this, I apologize in advance.

Registering with Linden Labs for VAT does NOT exclude paying VAT, I am still just as liable, only now, if I don't pay vat, instead of losing my account with Linden Labs, I can end up in jail. here is why.

You agree to collect VAT and then pay it quarterly. That is an implicit duty as far as I am aware. As I registered for VAT, got my VAT number, I now have to HOLD ONTO my VAT and pay it directly to the UK HMRC.

example: Between November 07 and 23 December 07, you billed me for £1,200 of VAT related Purchases, of which £209 were the VAT component.. I have to pay HMRC the sum of £209.69 VAT. ( to work out Vat Inc, the formula is Multiply by 7 and divide by 47, so a vat inclusive bill of £100.00 is £14.89)

So registering for VAT does not exclude me, it simple means I get to hold onto the VAT before sending it to the Tax Man, instead of you collecting it to send to the taxman. It is fair business practice, to offer a lower working price to a VAT registered business, as business men tend to regard other business men as professionals, as well as customers, not just a another source of income.

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So sum up:

1) Charging a bolted on tax to some customers, and not others, gives financial advantage to those who do not get taxed. That is plain Unfair.

2) Registering for VAT does not exclude you from VAT. It simple means that the customer pays the VAT direct to the HMRC and not to Lindens Labs to pay to the HMRC. It does not create a level playing field.

Response to M Lindens Post of '2 Months In'

We don’t complain about paying VAT crimson, we complain about an unfair and uneven playing field biased to financial favor for one sector of the market.

ie, Some users, (usa based) have a distinct financial advantage over other players, (non usa based). The correct implementation of VAT would mean that we all pay the same for , say, Land, tier, (295USD), however, the Lindens would get more of that from an America’s Based user, than they would a EU based user. The market would present a level playing field and eu people could fairly complete with USA people. As your not an a European, i doubt you will imagine it possible that your concept of fairness is the same as ours.

M Linden raises some good points, 1, incredible diversity of buzzwords, 2 Ability to crow over failures as though they were successes. 3, ability not to see irreparable damage being doe to island owners by the massive influx of cheap worthless mainland.4. The tier difference of 100 USD between mainland sims and estate sim is a bias that is killing off investors daily. We are actually asking Lindens to switch off our sims as they are no longer a financially attractive proposition and we cannot sell them.

I have tried to sell one of my islands recently and the usa based buyer wanted me to pay the tier, pay the transfer fee and give them 300 USD to take it off my hands, Guess what, that aint gonna happen Crimson. Sorry M Linden, your 2 months have generate for many a loss of confidence and a lower state of moral with a greatly reduced income generation.