The EU, VAT and Second Life: What can we do?

As many of you know, those of us who live in Europe have received a letter from Linden Lab warning us that, in future, we will be charged VAT. VAT stands for Value Added Tax – which is a variable sales tax, charged throughout Europing but at different rates in different countries – between, I believe, 15 and 25%. In the UK it is 17.5%; in Denmark it is 25%.

That means that European players who pay tier are now facing rises of up to 25% on tier and other expenses. This is a huge blow to small e-entrepreneurial European businesses in SL and puts us at a grave disadvantage to the rest of the world.

Here is the key part of the letter:
We have identified that you reside in a European country. Accordingly, your next bill will reflect Value Added Tax (VAT) charged at the rate specified by your country. Please note that VAT applies to all payments to Linden Lab such as land sales, monthly maintenance fees and Premium subscription fees.
If you are eligible for a VAT exemption, you may submit proof of your exemption status, such as your VAT number, here: https://secondlife.com/account/vat_enter_id.php
If you have other questions, please read the VAT FAQ: http://secondlife.com/corporate/vat.php
You can also contact us via the support portal: http://secondlife.com/support
Best regards, and thank you for your continuing support.

There’s a further explanation on the blog: http://blog.secondlife.com/2007/09/28/questions-about-vat/

This seems to affect only land and fees at the moment: moving Lindens in and out of Second Life appears unaffected (although, of course, once a certain level is crossed, that too will become taxable – but on an individual level).

So what can we do about it?
Quite a lot, actually, if we’re prepared to work together – not just to vent, but to take action.

I’m planning on using this blog to get the ball rolling.

We can lobby MEPs individually as well as putting together a petition. We can also lobby national MPs and government departments charged with promoting e-commerce.

I suspect individual emails from voters, asking questions that have to be answered, will have more effect than petitions unless we were able to collect a HUGE number of signatures. Although there might be a way
to do that too.

People tend to dismiss Linden Labs, but what hurts residents economically hurts them too. They don’t want to lose businesses or residents, or be seen to have an economy in decline – because that will hit them hard too (and at a time when other organisations seem to be gearing up for virtual worlds). So their support for a petition would be very useful.

And what about spreading this through other games that could, in the future, be affected?

If you want to get involved – either helping to organise this, or simply just by sending messages to your MEPs, MPs and/or government departments, add your name in the comments (and what you’re prepared to do).

Let’s see if we can make a difference.