VAT. What?!

A few days ago, our dear friends the Lindens surprised us European SL residents with the glad tidings that from now on, we are going to be charged VAT (Value Added Tax) on our subscriptions, tier payments, and land purchases (if we buy land directly from LL). As you can imagine, this has caused quite a ruckus among us EU people. I have written to the EU to seek some clarification on this issue, and I thought I’d publish my letter here so everyone can make use of it. Here it is:

Dear Madam or Sir,

I am a user of a virtual world called “Second Life” which is run by a US company called Linden Lab, located in San Francisco, California.

I am writing to you because a few days ago, Linden Lab has announced that they will be adding VAT to the US$ fees they are charging from their EU customers. As their reason they cite “sales tax regulations of European Union countries”. From what I could gather, what they are referring to is an EU regulation about the taxation of “electronically supplied services” that took effect on July 1, 2003.

Now there are several reasons why it seems highly doubtful to me that Linden Lab has interpreted this regulation correctly and that the way they are trying to implement it is legal:

1) Both the service and the access software for Second Life are actually free of charge. What you pay for, if you’re paying anything at all, are the following items:

a) a premium membership fee which carries certain privileges, such as a weekly stipend paid in the in-world currency of Linden Dollars (L$) and the right to purchase virtual land in Second Life;

b) currency exchange, i.e. purchase of L$ from the Second Life “LindeX”;

c) purchase of virtual land directly from Linden Lab (as opposed to from other Second Life residents);

d) tier charges, i.e. a monthly use fee for any virtual land you are holding (comparable to a land tax).

It seems to me that none of these items can be classified as belonging to any of the categories specified as electronic services in the commentaries on EU regulations that I have found.

2) The VAT charge is being implemented without prior notice. I have been notified by email on September 28, 2007. My next tier payment is due October 14, and on my account page the amount due has already been changed to reflect the added VAT charge. This payment is due for my current tier month, which means when I received the email it was already too late for me to avoid that payment either by getting rid of my virtual land or by deleting my Second Life account altogether. The VAT charge was dropped on me after the fact without leaving me any chance to deflect it. And I am lucky; I have been talking to a number of Second Life users from the EU who still haven’t received their notification, yet their accounts show that they are going to be charged more than they bargained for at their next billing date.

3) As far as I can make out, Linden Lab will not be providing written invoices.*

4) No VAT registration number has been published by Linden Lab.*

5) The prices for the items mentioned above are not VAT inclusive.

To summarize, it is my belief that Linden Lab has insufficient grounds for charging VAT from their EU customers at all (see #1 above) and that the procedure by which they are implementing this is illegal (see #2 – #5 above).

I would be grateful for an authoritative statement on this.

Yours sincerely,

*As Mariemarie has pointed out, these points have been corrected since I received my notification email by entries in the Knowledge Base and now in a blog entry by Zee Linden, too. I leave them in here anyway because this is the letter as I sent it to the EU.

Tea Anyone?

Just a quick word today … I read on SLNN yesterday that ING Asia/Pacific is hosting a contest to find a logo for a tea room chain they are planning to open in SL. Of course I couldn’t resist putting in an entry . Here it is:

You can find out more about this contest here.

The contest is decided partly by public vote and partly by a jury. As I became aware of the contest rather late, my chances of getting a lot of public votes are a bit slim. So if you’d like to help me out there (and if you like my design, of course), drop by in-world at ING Cha Lounge and cast your vote for me. Thanks!

New Discoveries

I made a few exciting new discoveries in the last few days. On Wednesday I went to a concert by guitarist JeanChristophe Chevalier – a brilliant instrumentalist covering a wide variety of styles from classical to blues and Celtic. If you haven’t heard him before, do check out one of his next gigs.

After the concert I had a chat with a very nice and beautiful lady called Anastazia, who manages the SL affairs of composer and multi-instrumentalist Kurt Bestor, aka in SL as Kurt Jano. She invited me to his concert at Vibe HQ (Shaea) the next day, and I am really glad I went. This guy plays a piano that sets the strings in your soul swinging. Other things we heard from him that day were guitar, trumpet, harmonica and flugelhorn. And his voice! Kurt wrote a hilarious song about Second Life called “Poseball Blues” – you gotta hear that. He also wrote a hauntingly beautiful a capella piece (singing in choir with his own pre-recorded voice) called “Prayer of the Children”, also something not to be missed.

Speaking of the flugelhorn … for those who don’t know, this is a brass instrument, somewhat similar to a trumpet, but with a much warmer tone. I love the sound. At Kurt’s concert, the flugelhorn was heard, but not seen, as he didn’t have a prim flugelhorn in SL yet. Well, he has got one now, for I decided to make one for him. (A great help with that was Lex Neva’s excellent free pipe building tool, also a new discovery I made this week, which I cannot recommend highly enough.) Check out whether he’ll play it at his next gig on Thursday!

Another great new discovery is a place called Eloreaven Gardens in the Hokkaido sim, which I predict will soon be an all-time favourite for all fans of romantic surroundings, formal dancing and prim art in SL, as well as the place of choice for weddings. You can walk in the clouds there, dance amidst the stars and galaxies, take a refreshing bath in a grotto full of roses or find lots of beautiful and inviting secluded little spaces. And I’ve only begun to discover it all, so the list is by no means complete. Their grand opening is tonight, Saturday, May 12, at 7pm SLT, unfortunately a bad time of day for this German blog writer, or I definitely would be there. If you have time, don’t miss it!

So … two great new musicians to listen to, a wonderful new place to explore, a very neat building tool, and, above all, a great new friend … exciting week in SL.

Dylan and the Art of Dramatic Writing

Okay now that Ivy’s story has been told, which was the original purpose of creating this blog, the question has come up whether I’ll continue to write things here or not. Well, I decided to at least give it a shot. Whether I’ll become a regular blogger remains to be seen.

When I set up this thing in a hurry, I gave it the title “Dylan’s Drama” on the spur of the moment. I still think it’s fitting, so Dylan’s Drama it shall remain. This gives me a cue for my first “regular” entry here … my experience with the word “drama” in Second Life.

I ought to mention that I’ve never been much of a chat room lurker. I’ve been on the Internet since it became widely available, and on Compuserve before that (anyone remember Compuserve Information Manager 2.0 for DOS?). I participated in a number of forums on Compuserve and later frequented the Usenet. These things were great to exchange information on specific topics, but they never gave occasion to what is called “drama” in on-line communities like Second Life. More generally, I never became very versed in the on-line jargon that is widely used in chat communities.

So when I first came to Second Life in October 2006, I was a newbie not only in SL, but in chatting generally. It wasn’t long before I noticed that in many places I visited or looked up in Search, there were signs or notecards or profile entries asking for “No drama please”. And I kept thinking, “What the heck do these people have against the theatre?” Because I myself am very interested in the theatre. I even toyed with the idea of organizing stage performances – my dream was to recreate Dresden’s Semper Opera in Second Life and have a live performance of “Le nozze di Figaro” there. Who knows? Maybe it will happen some day. But at first, I was stumped … when I did an in-world search for “drama”, “No drama please” was all I ever found.

And I must admit, I’ve come to understand and share the sentiment. In the last few weeks, at least three partnerships have been dissolved within my circle of friends in Second Life. Two people I cared for have dropped out of SL because of that, at least for the time being. What is even more disturbing is the effect this has on the whole gang. People are taking sides, forming opinions on what the persons involved should or should not have done or should be doing next, talking behind people’s backs, shifting blame back and forth, or else withdrawing from the others because they can’t stand all this. There’s drama for you, the SL variety. I wholeheartedly agree that it is a regrettable thing.

Still, I think stage performances in SL would be a very cool thing indeed. So far I’ve seen a symphonic concert on Silicon Island and a ballet (!) performance. The advent of voice support will open up whole new possibilities there. And lots of creative work to come for us animators! Which reminds me – I got to send off my entries for that speech gestures contest …