VAT continued

In a further comment to the current VAT fiasco, Robin Linden refers to an article of the EU Tax directives that forced Linden to take the steps they did. Reading that BLOG entry has left me somewhat shocked for two reasons:
1. In it he claims that Linden Labs have been meeting with ‘leading VAT consultants’ in the EU that led to them suddenly having to charge VAT – he misses the fact that if this was indeed true, he is also implying that they should have had ample time to forewarn EU citizens of such an impending step and indeed allow some debate on the issue. Furthermore these same VAT officials would have made it clear to LL that charging VAT additional to a quoted fee or invoiced amount in the EU, and in my case specifically the UK, is illegal. It leaves me with this thought – who were the ‘leading consultants’ offering their advise to LL and were they indeed qualified to do so?
2. He refers to an article in which electronic services or products are shown to be VAT’able for several reasons and it gives an argument that leads one to believe that LL had no choice in the matter. – In fact they do and the article referenced here is misleading and used out of context. LL is NOT delivering electronic services or products to EU or UK citizens at all, as indeed is seen by the charges to us made in USD, and not a local currency. Furthermore these electronic services refer to products or services to the player, not the avatar, and refer specifically to music files, video files and game memberships. At worse we could be charged for playing SL through the inclusion of VAT in the premium membership fee. None of the other content is in any way delivered to the player, as it all refers to in-world activities that can have no direct impact on the player outside that environment. In a simple way the player cannot download the new land he or she bought, he or she cannot download the Lindens exchanged, as these are both only valid in the SL world or grid. SL furthermore made it clear in its ToS that it only facilitates access to SL for players, and again here VAT may be valid with proper consultation through a membership fee inclusion. However it makes it clear through the ToS and through its own actions in the past that it sees itself as a US based company and service that allows open enrollment to its world, and leaves the in-world activities and content creation to its residents. The clearest action that LL made to indicate its own position on the matter of a global platform or US platform was the outright banning of gambling in Second Life, a very harsh step aimed at reducing its exposure to prosecution in the US under US laws of gambling prohibition. No consultation or debate was allowed to those residing outside the US in countries where gambling is completely legal and not an issue at all.

So here again is my argument: As an owner of several sims in SL where content is offered to residents either on a free to use basis or sold against other competition, the current VAT charge and manner of charging has not been properly considered at all by LL, as it seriously impacts my own competitiveness in Second Life.
Furthermore the ownership of these very sims has not given me any access to proper debate within LL where the VAT issue could have been debated and discussed, even though it clearly impacts my own activities within LL negatively and one can argue contradicts the very agreement between LL and myself at the time of the sim purchases.
No attempt has been made to communicate with sim owners like myself at all, and no meeting or conference called or chat initiated to debate this by LL.

Does this constitute fair treatment? Furthermore as the Lindens have now indicated their participation and supposed compliance to EU and therefore UK laws, have they considered that by applying VAT in the manner they did contradicts the Distance Selling Act in the UK?

I apologise to other EU residents for my ample use of the UK here, but I am resident there and therefore biased to the understanding of my local legal and tax system and not the rest of the EU. Please add any comments here that are specific to your own situation and I will post them as well.


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