The Stamp Act of 2007
With Linden Labs latest changes that include charging residents of the European Union a Value Added Tax (VAT), it seems that it’s only a matter of time before the dominoes start to fall and they’ll be following up by charging taxes to residents of other countries. With differing percentages and no desire to look it up, further, at the moment, it sounds like the tax will add an extra 20% to 25% to what EU residents are already paying for premium account registration, purchases from the Land Store, land use fees (tier), private region fees, and land auctions. The page on their web site that explains VAT says that it will not effect transactions in L$ between individual Residents.
According to those that have received notice about VAT being charged to their account, the law has been in effect since July 1st, 2003, and thus, they will be charging accounts accordingly.
First of all, this WILL effect transactions in L$ between residents. If an island owner that was paying $295 USD for a tier fee suddenly has to pay $368.75 USD, you can bet that this will be passed along to customers. They’ll need to make, roughly, an extra L$21,000 per month to avoid “losing” any money. Some that are already cutting their margins pretty close will decide to get out, for this reason, alone.
Any bet as to how long it’ll take the United States or other countries to start doing the same? There’s already been rumors or this happening, just like there was rumors of closing down casinos. The fallout from that would be huge.
My big question: Does anybody remember what happened in Boston in 1773? Hint: It led to a revolution!!
UPDATE: Tyrian Camilo believes that LL committed fraud by “introducing” VAT.
Malignant Narcissist @ September 30, 2007
Just to clarify some things, the law as such is not in effect since 2003, but rather July 1st 2007. It was first proposed and drafted by EU regulators in 2003.
ServMe, no you are incorrect, it was drafted in 2003, and taken in effect 1st of July 2003.
The article where you read that contains a mere typo.
Tyrian is correct, ServMe. Take a look on this page (which I had also pointed to in the post).
The third paragraph says:
“The special scheme was introduced when the changes to the EU place of supply rules for these services took effect from July 1, 2003. On that date, these services, when supplied by non-EU businesses to EU consumers, became subject to VAT in the Member State of the purchaser. Under the normal rules, non-EU businesses are required to register separately and account for VAT in each and every Member State in which they supply goods.”