Did Linden Lab blow it on Euro VAT rollout?

I’m no expert on the Value Added Tax – and apparently neither is Linden Lab!

The Secondlife Newspaper offers a pretty rough critique of how this policy rollout was handled, in addition to the policy itself:

 SL’s European residents were treated to yet another example of Linden Lab’s fanatical focus on customer service and their legendary marketing/PR expertise with the unexpected announcement that they would begin collecting “EU VAT” on all transactions between individuals and Linden Lab. The fact that there is no such thing as an “EU VAT”, that the requirement has been in place since July 2003, that every transaction must supply an invoice with LL’s VAT number on it, that VAT is presumed by law to be included in the price unless otherwise stated, and that the law generally requires a refund to be made when the taxed service is not available (aka, downtime) all seem to have escaped the notice of every single one of the “highly-qualified tax advisors” that LL allegedly consulted. Many residents received their VAT tax bill from Linden before they were notified of the change, clearly not the “30 day” notice that EU law specifies. [emphasis added]

There have been a couple questions about exactly how much lead notice that Lukas Mensing and the rest of Linden’s European customers should have had.  Sounds like 30 days notice is a good start.

The Second Life Herald, in a previously-referenced critique, shoots a number of holes in the VAT plan, including these:

EU VAT is not some sort of ‘buffet’ from which you pick the bits that look tasty (the collection of VAT for instance) and reject the bits you don’t like the look of (the associated administration requirements for instance, or even, dare I suggest, forwarding the collected tax to the relevant tax collection agencies).

So what do you do?  SL Insider suggests that you might want to go to the source and file a complaint.  (Or does the interestingly-timed Terms of Service change calling for arbitration cover this circumstance?)

Here’s the question, for EU residents – It’s obvious that the EC regulations in this are placing you at a competitive disadvantage. Are you planning to lodge a complaint with the European Commission about this requirement of the VAT-on-E-Commerce directive?

The can is opened, and thete are worms inside.  This ain’t good.  And, in the balance, is a jewel of Second Life – Lauk’s Nest.

Going forward, I’m not going to spend as much time on the tax issue.  The challenge facing the arts and cultural communities is whether Lauk’s Nest will go away forever.  We just can not let that happen.

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