Eirik

A friend of mine from the Netherlands and I, we were talking recently, about LL and how they deal with money. Kinda got into the topic because I just payment verified my account.

He mentioned he registered a random VAT ID he found on some company's website, and he now is safe from paying VAT to LL.

Legally this counts as fraud and tax evasion, right? Maybe the lawyers can answer that question better than I can.

But the legality isn't really what I'm concerned about. Since IMO illegal things are only bad if you get caught.

And that's just the thing. He claims he has been registered as a VAT excluded user in SL ever since they originally started charging VAT from Europeans. Does LL really not spend any time checking the data? Like, if the VAT ID and the Payment verification Paypal account have a different RL person as registrar ... doesn't that raise any red flags?

Or do they just not care enough?

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Phoenix Psaltery

See, the whole VAT thing is the single solitary thing in my life that makes me glad I'm not European.

P2

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JennL

If he gets caught he will be in a lot of trouble. There is one person more powerful than the tax man, its the VAT man. Its just not worth the risk imho as the penalties can be severe giving what you are saving by doing this.

Lewis Luminos

Oh hell yes. He'll get caught too, at the end-of-year audit of that company he stole the VAT ID from, when their annual figures don't add up.

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Tyche Shepherd

Actually it won't be picked up on end-of-year audits of the company the VAT ID applies to - where it will (and it definitely will) be picked up is during Linden Lab's VAT inspection. Most VAT registered companies will have an inspection at least every two years here in the UK, though frequency of inspection may be different in other EU countries (Though I understand that LL used the UK as their registration country) . The VAT people do back check and this includes contacting other EU tax offices. I know this from personal experience , as I have several EU clients, one of which got in trouble with his local tax people (Eire) over VAT exemption registration with me in the UK.

On the point of LL checking - It turns out it's not their responsibility to check the number is valid , just report and keep records of all such registrations to the VAT authority they are registered with when they are inspected.

EDIT: It also gets tricky even if you have a Valid VAT ID . I am Vat Registered for my RL Business, however my SL expenses are not business related so if I used my VAT number to be exempt from VAT I'd have to jump through loops justifying why I'm claiming back VAT on the land I rent to host some Shibari Bondage frames is really a legitimate business expense - It may be different if I generated substantial business in SL but I don't.

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caroline ra

The lack of nationalised healthcare is one of many things that makes me glad Im not American


I feel VAT is a small price to pay for the NHS alone.


This guy is just a tax fraud and will eventually be caught and the tax man never forgets.

I agree with Jen its just not worth it.














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Ciaran Laval

I'm surprised this doesn't get mentioned more often. When they introduced VAT plenty of people said they had an RL business so they'd just use that number but their SL use would have to be business related otherwise the VAT man will kick your backside.

The other side of the coin is that if you do run a real business in SL and all your transactions are done inworld, you'll have trouble not paying VAT too as inworld transactions aren't considered services for the purposes of VAT so you're at the end of the VAT chain.

Eirik

Heh. Guess that I'll still laugh last anyway, paying that bit extra money.

Freyja Nemeth

The worst thing about VAT isn't really paying it, its how darn complex it makes doing taxes. Especially when you get into scenarios where you buy stuff for your business that doesn't have VAT added ... and then you need to pay it yourself and then reclaim it. Makes my head spin.

If I ever got around to doing something business-like in SL, my RL business-registration could probably cover it, its loosely enough described, but the opinion from the Swedish tax people is that I should then be charging VAT to end customers in the EU. Which could prove a wee bit tricky in SL, heh.

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