VAT Number & Feedback

[QuarterMasterM]

As we stated yesterday, the increased Euro and GBP pricing is due to VAT which we are now required to pay as we officially expand our services to Europe. For future reference our VAT number is: EU 826 015 089.

We are excited to begin offering a full-fledged service to Europe and to enhance the game by bringing more players from around the world together to play DDO. As DDO continues to evolve your input on issues such as this is important and we have set up a new thread for you to provide constructive feedback. We look forward to working with you to make more improvements to our service over time.

Thank you, and enjoy the game!

[Aurora1979]

Thank you.

I dont think there was any (many) people on here actually moaning about paying the tax.... Incidentially, i do think its a little bit mental but then, no one blames turbine for that...

All we wanted was to know it was legit and to be provided with the vat number, as this is your (turbines) "proof" that they are in fact making a payment to the tax man.

FYI: I dont know ANYTHING about tax law... you could even of made that number up :) but im sure its all legitimate.


EDIT:


One question though.... will turbine be paying back tax since you took over from codemasters? If so, is this cost going to be passed down to us at a later date? If so, can we be assured that Turbine will FOREWARN us :) please.

[PopeJual]

As we stated yesterday, the increased Euro and GBP pricing is due to VAT which we are now required to pay as we officially expand our services to Europe. For future reference our VAT number is: EU 826 015 089.

Because different countries in Europe have different VAT percentages, how will Turbine differentiate between those countries and does Turbine plan on charging different VAT amounts based on country?

Also, how will Turbine determine whether a particular customer is subject to the VAT?

[Hendrik]

Thanks QMM!

I'll get the first round for you and Jerry.

:cool:

[dunklezhan]

For future reference our VAT number is: EU 826 015 089.



Many thanks QM.

[Marewood]

As we stated yesterday, the increased Euro and GBP pricing is due to VAT which we are now required to pay as we officially expand our services to Europe. For future reference our VAT number is: EU 826 015 089.

We are excited to begin offering a full-fledged service to Europe and to enhance the game by bringing more players from around the world together to play DDO. As DDO continues to evolve your input on issues such as this is important and we have set up a new thread for you to provide constructive feedback. We look forward to working with you to make more improvements to our service over time.

Thank you, and enjoy the game!

The VAT number and the deducted amount needs ot be listed on the DDO store bill and not on some forum post after two days of flaming. You could have avoided all the hassle on the forums by puting this information on the receipt where it belongs in the first place.

[Lorien_the_First_One]

Because different countries in Europe have different VAT percentages, how will Turbine differentiate between those countries and does Turbine plan on charging different VAT amounts based on country?

I thought it was pretty well established in the other threads that under the distance rules unless they sell more than 100,000 euro of goods to a particular country the default (UK) is the correct rate to legally use under the treaty.

[BruceTheHoon]

I'd still like to know, how does Turbine determine, who's from the VAT obliged countries and who's not. Just out of curiosity.


We are excited to begin offering a full-fledged service to Europe and to enhance the game by bringing more players from around the world together to play DDO...
Enhancing the game by raising the prices. That's an interesting way of putting it. It's not like we were unable to play before...

[Hendrik]

I'd still like to know, how does Turbine determine, who's from the VAT obliged countries and who's not. Just out of curiosity.


Enhancing the game by raising the prices. That's an interesting way of putting it. It's not like we were unable to play before...

HM Revenue & Customs (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000922&propertyType=document)

[BruceTheHoon]

HM Revenue & Customs (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000922&propertyType=document)

It might feel witty, but HM Revenue & Customs doesn't really state how Turbine determines where I'm from.

[Beethoven]

The Directive gives a number of options to a non-EU business which finds it has to collect and account for VAT. The choices for achieving compliance include establishing within the EU or registering as a non-established supplier in each Member State of the EU where taxable activities are conducted.

The Directive however also introduces a new special simplified scheme whereby non-EU suppliers who are affected by its provisions may choose to register with a single VAT authority in a Member State of their choice. Under this special scheme, all the procedures they need to fulfil - registration, payment and reporting - will be handled through the tax administration which they have selected, which will also give them guidance on how to meet their obligations.

The non-EU e-commerce business using this special simplified registration scheme will be offered a set of procedures which are easier to operate and more business-friendly than the existing rules for non-resident businesses generally. The single registration model provides a streamlined set of obligations that can be easily completed online without the need for a fiscal representative or for any physical presence.




It might feel witty, but HM Revenue & Customs doesn't really state how Turbine determines where I'm from.

From the same webpage:



The Commission and Member States are of the view that the measures expected of suppliers should be proportionate (these are mainly low value transactions) and realistic in the light of a technology that is still developing. For the most part, deciding tax on the basis of a customer declaration, which is potentially verifiable against a credit card billing address or by geo-location tools, is both acceptable and in line with business practice.

The national administrations will also explain how to account for this tax, how to prepare and submit a declaration or return and how payment should be made. As a result, the VAT rate applicable to non-EU suppliers' sales to consumers will in any Member State be the same as the rate charged by a local supplier. The country of registration will be responsible for re-allocating the VAT revenue to the country of the customer on the basis of the information supplied by the non-resident business.


Do I really need to point out it was not Turbine who came up with that system but the European Commission and any complains about how it is unfair to businesses and/or end-customers would probably be better addressed with them?

[Ducaster]

As we stated yesterday, the increased Euro and GBP pricing is due to VAT which we are now required to pay as we officially expand our services to Europe. For future reference our VAT number is: EU 826 015 089.

This is a good step but I am still not personally happy. That VAT number does not match any format that I was personally aware of OR was able to find by a few minutes web search.

Given the arguments already raised, I too would have assumed that Turbine would have registered through the UK and had therefor a GB prefix not the (to me at least) mysterious EU prefix.

Using the European VAT number online validation tool the number above is rejected from all three of the main countries Turbine has obviously dealings with (UK,Germany & France) So I remain confused and unsatisfied. Can you clarify further please Q-M?

[Solmage]

As we stated yesterday, the increased Euro and GBP pricing is due to VAT which we are now required to pay as we officially expand our services to Europe. For future reference our VAT number is: EU 826 015 089.

We are excited to begin offering a full-fledged service to Europe and to enhance the game by bringing more players from around the world together to play DDO. As DDO continues to evolve your input on issues such as this is important and we have set up a new thread for you to provide constructive feedback. We look forward to working with you to make more improvements to our service over time.

Thank you, and enjoy the game!

Call me crazy, but if I were to ask 100 European players if they'd rather not have the client localized but instead save the VAT, what would you imagine they'd say?

(Personally, I'm curious, but I do know what *I*'d say :) )

[Solmage]

Using the European VAT number online validation tool the number above is rejected from all three of the main countries Turbine has obviously dealings with (UK,Germany & France) So I remain confused and unsatisfied. Can you clarify further please Q-M?

From 45 seconds of googling:

http://en.wikipedia.org/wiki/Value_added_tax_identification_number

"Foreign companies that trade with non-enterprises in the EU may have a VATIN starting with "EU" instead of a country code.[1]"

[Lorien_the_First_One]

From 45 seconds of googling:

http://en.wikipedia.org/wiki/Value_added_tax_identification_number

"Foreign companies that trade with non-enterprises in the EU may have a VATIN starting with "EU" instead of a country code.[1]"

What I find facinating about this process is how quickly people assume Turbine is running a scam and flout how well they know their laws and how Turbine is breaking them. Then in 45 seconds you get the answer for them lol.

Seriously people, do you try to verify every VAT number at every store you go to?

[BruceTheHoon]

Do I really need to point out it was not Turbine who came up with that system but the European Commission and any complains about how it is unfair to businesses and/or end-customers would probably be better addressed with them?

Nobody is asking you to, probably because even calling that 'more than abundantly clear' would be an understatement.

What you could point out is, where in that quoted text does it say how exactly Turbine determines where I'm from (is it geo-location, CC information or do they just believe what I've written in my account's profile - yes, I've read the link the first time it was posted in another thread). But this is a rhetorical question, since the quoted text does not contain that information, so you don't have to point that out either.


Let me rephrase my question and put it into context:
If I were to physically go out of EU, would the prices drop (= geo-location), or stay the same (= CC information).

[ShotByBothSides]

Thanks very much for answering one of the commonly asked questions about the VAT number

It would be good to have answers too to:

a) How the TP prices are calculated taking into account VAT?
b) A statement of your intentions regarding VAT receipts for the purchase of TPs.

I think once that is understood we can all move on and make individual decisions about whether or not TPs are still good value for our money.

[CeltEireson]

What I find facinating about this process is how quickly people assume Turbine is running a scam and flout how well they know their laws and how Turbine is breaking them. Then in 45 seconds you get the answer for them lol.

Seriously people, do you try to verify every VAT number at every store you go to?

What I find fascinating is that some people actually think that Turbine are scamming folk and keeping the money for themselves. Saying you're charging tax and then keeping it for your own company is called fraud and folk in Turbine would likely do jail time once caught because lets face it sooner or later someone in officialdom either in the states or UK would eventually notice that no tax money was being handed over.

Turbine like most other online games companies will occassionally bend the truth, change their minds, not tell us stuff that they should etc etc but if anyone thinks theyre going to commit such an easily proveable fraud...

Having said that they did totally screw up how they handled this - should have been announced well in advance of the change and the reasons / calculations etc made plain from the outset, so from that point of view they only have themselves to blame for all the fuss even if some of it is way over the top.

[Shade]

Do I really need to point out it was not Turbine who came up with that system but the European Commission and any complains about how it is unfair to businesses and/or end-customers would probably be better addressed with them?

No but you should point out that there is no such thing as a "international tax law" (Thus why they weren't breaking the law before when they sold vip or other things to europeans over the years without taxes)

Complying with the european commission is entirely up to turbine. As a amercian company, they fully have the right to not charge or pay VAT, or any other countries taxes.

Americas who buy from american companies on the internets have laws for that sure. Internationally? No.

It's something they chose to do, to be friendly with the EU comission. Not a law.

I'm canadian, and I certianly don't a pay a cent of tax to you guys for anything I purchase online on any (american) .com site. Even tho canada is friends with the US, we don't have to follow your laws internationally. What I do have to pay sometimes are import fees. But as of yet, the US has yet to make up a law to charge import feats on digital goods, so I don't pay them for that.

It's a simple rule when it comes to international things:
Your laws are not our laws, keep that in mind. What turbine is doing is purely by there own decision.

[PopeJual]

Americas who buy from american companies on the internets have laws for that sure. Internationally? No.

It's something they chose to do, to be friendly with the EU comission. Not a law.

So, um... Microsoft and Google comply with decisions that the EU hands down just because they like to be friendly? That seems about as likely as the "forward this and Bill Gates will send you $100" email.

[wez]

I think once that is understood we can all move on and make individual decisions about whether or not TPs are still good value for our money.
made my decision,i own all packs so far and wf but not buying anything else unless i grind tp
its not just the tax rise,its no warning and a new content coming out
thanks for ruining the way i feel about this game turbine

[Shade]

So, um... Microsoft and Google comply with decisions that the EU hands down just because they like to be friendly? That seems about as likely as the "forward this and Bill Gates will send you $100" email.

Microsoft and Google have local offices and full fledged business located in Europe. To operate those in europe, they must fully comply with european law.

Turbine does not.

Very simple.

Even if they upset the EU comiision: The worst europe could do is try to enforce a law that makes ISPs block access to american websites like Turbines, preventing access to the game.. Like china does for some things. But europes cool and have never done that yet far as I know. (Well except certain German ISPs)

[CeltEireson]

It's a simple rule when it comes to international things:
Your laws are not our laws, keep that in mind. What turbine is doing is purely by there own decision.

Except their parent company is an international company that does business all around the world and the EU could fine them just as they fined Microsoft for breach of EU law. If Turbine was an independent company based solely in US then yes theres probably little that EU could do if Turbine decided not to abide by EU legislation, on the other hand even if Turbine was independent the EU could stop them doing business here by ohhh insisting that ISPs block their IP address, ask the credit card companies not to process transactions etc etc - theyre very unlikely to do all that for whats probably a comparatively small sum, especially if it required additional legislation but if they chose to they could make life difficult for Turbine in terms of their EU players.

So if you want to do business in a foreign country its generally wise to follow the local law if you want to continue to do business.

[Shade]

Except their parent company is an international company that does business all around the world and the EU could fine them just as they fined Microsoft for breach of EU law.

Yea thats most likely why they are doing this.

[Anneliese]

Even if they upset the EU comiision: The worst europe could do is try to enforce a law that makes ISPs block access to american websites like Turbines, preventing access to the game.. Like china does for some things. But europes cool and have never done that yet far as I know. (Well except certain German ISPs)

AFAIK, there is currently no site blocked from access from Germany. (in the past there were some occasions of this, but they were all taken down by court or voluntarily). There was also a law planned for blocking sites, but at first the President of Germany refused to sign it - and currently it is suspended (it was never put to use).


The only thing that happens, is that some sites do not show up in localised search engines, like google.de. But thanks to the power of the internet ( :D ), you can just go to *drumroll* google.com

[pal_sch]

No but you should point out that there is no such thing as a "international tax law" (Thus why they weren't breaking the law before when they sold vip or other things to europeans over the years without taxes)Strictly speaking there is no international tax law but in the same sense as there is no international law at all. All international law is a network of national laws and treaties designed by individual governments and coalitions of governments. Agreements to recognise other nations laws are what gets your own laws recognised in turn.

While you could try ignoring the tax requirements of another nation, on the immediate level that nation could refuse your right to do business within their borders. You are breaking their laws, so they could prosecute you at any time you fall within their jurisdiction. But above and beyond that they can seek to have your own government recognise the crime and punish you for it in return for their punishing those who break your countries laws. While this only usually happens at the most extreme levels, there tend to be standing bodies and rules for issues like tax evasion which most nations (beyond tax havens) cooperate with.
Complying with the european commission is entirely up to turbine. As a amercian company, they fully have the right to not charge or pay VAT, or any other countries taxes.Only if they do not do any business within the borders. Once you have a presence within a nation, even just electronically, you have to take into account their laws.

The EU law dictates that VAT is paid on all goods and services sold to those within their borders, regardless of the seller's location. You can't get away from that. Even if Turbine were three guys in a shed somewhere with no physical international presence or connections they would still be liable for the tax.

[Blackbird]

No but you should point out that there is no such thing as a "international tax law" (Thus why they weren't breaking the law before when they sold vip or other things to europeans over the years without taxes)

Wow...then those 2 courses I've been taking as part of my LL.M. in tax must have been imaginary.



Complying with the european commission is entirely up to turbine. As a amercian company, they fully have the right to not charge or pay VAT, or any other countries taxes.

That is incorrect. If you do business in a country you must comply with their laws. Turbine is doing business in Europe and must comply with its laws.

If you want to go even further, Turbine has [insert EU country here]-source income. There are US-[insert EU country here] tax treaties for almost every single EU country (maybe all EU but not all European).



I'm canadian, and I certianly don't a pay a cent of tax to you guys for anything I purchase online on any (american) .com site. Even tho canada is friends with the US, we don't have to follow your laws internationally. What I do have to pay sometimes are import fees. But as of yet, the US has yet to make up a law to charge import feats on digital goods, so I don't pay them for that.

It's a simple rule when it comes to international things:
Your laws are not our laws, keep that in mind. What turbine is doing is purely by there own decision.

Here is the way income taxes work:

The US can tax all its citizens and residents (i.e. non-US citizens who meet certain tests, like the # of days in the country a year) on their WORLD WIDE income, from WHATEVER source derived. That means the US could tax me on interest on my Swiss bank account that never left Switzerland and came back in the US or wages I earned while working for a Chinese company in China. I can get a foreign tax credit (if I paid foreign income taxes) and there are some exclusions as to amounts for services (if you meet certain tests) but I must pay US tax on the amount if it's more and don't get full credit if the foreign tax is more (this example is way more complicated then it sounds but I'm trying to simply it).

Additionally, the US can tax NONRESIDENTS on their US-source income. What's US-source income? Well, it's a lot of things -- dividends from US company, earnings from sales where title passage took place in the US, etc.

Countries' tax laws do not stop at their border. Turbine is selling into the EU and must comply with their laws as a matter of law, not as a matter of choice. If you think they can't enforce it, you're wrong. Just ask UBS (Swiss bank) about it's recent run-in with the IRS.

You are confusing US sales tax with European VAT. US sales tax is a STATE, NOT federal tax. There are constitutional limits on a state's ability to charge/collect sales tax. You can't compare it to a VAT, 2 very different taxes.

[Hendrik]

It might feel witty, but HM Revenue & Customs doesn't really state how Turbine determines where I'm from.

CC?

IP?

Billing Addr?

Take your pick.

See, the VAT tax goes to the UK. THEN the UK hands it out from there. So, if you want to know if your Country is getting it's tax from Turbine, go talk to the UK.

[Beethoven]

CC?

IP?

Billing Addr?


Billing address. Why would they use IP (geo-location)? It requires far more effort and any mistake would be considered their responsibility. They use billing address and the burden of responsibility falls upon the customer. You (as customer) are supposed to provide companies with correct information. You give them wrong data, you'd be the one getting into trouble.

There is no legal requirements for companies to track of verify the information their customers provide them with. In fact, governments may not want to even encourage businesses to share information what they use as it would make it easier for them to evade taxes. I know for a fact they use billing address I could get the idea to simply use a US address to prevent having to pay VaT and hope no one ever checks.

[Hendrik]

Billing address. Why would they use IP (geo-location)? It requires far more effort and any mistake would be considered their responsibility. They use billing address and the burden of responsibility falls upon the customer. You (as customer) are supposed to provide companies with correct information. You give them wrong data, you'd be the one getting into trouble.

There is no legal requirements for companies to track of verify the information their customers provide them with. In fact, governments may not want to even encourage businesses to share information what they use as it would make it easier for them to evade taxes. I know for a fact they use billing address I could get the idea to simply use a US address to prevent having to pay VaT and hope no one ever checks.

Prolly right pal, Billing addr.

Can say one thing, have learned more then I ever wanted to about VAT.

;)

[learst]

I always find it funny that it's called the Value Added Tax, which reminds me of stuff like value-added service/benefits etc. Like some free service that came with the stuff you buy, or just by adding some extra cash you can get more of the item/service.

But VAT is just a flat tax on what you buy, and that's it. Perhaps you might get some of the benefits indirectly based on your tax money. :P

/derail

[Tumarek]

Billing address. Why would they use IP (geo-location)? It requires far more effort and any mistake would be considered their responsibility. They use billing address and the burden of responsibility falls upon the customer. You (as customer) are supposed to provide companies with correct information. You give them wrong data, you'd be the one getting into trouble.

There is no legal requirements for companies to track of verify the information their customers provide them with. In fact, governments may not want to even encourage businesses to share information what they use as it would make it easier for them to evade taxes. I know for a fact they use billing address I could get the idea to simply use a US address to prevent having to pay VaT and hope no one ever checks.

http://www.whatismyip.com/tools/ip-address-lookup.asp

most certainly IP. My dead grandmother could find out where you live if she had your IP ^_^ (well at least where your ISP is sitting... normally the same country as you)

For one even if your billing adress is correct, lets say you are in the states for whatever, play a round of ddo and buy points. At this point you shouldnt pay VAT to any european country but you would if they use your billing adress.

Other way around, an american in europe would have to pay vat on anything he buys here, including turbine points... so again billing adress would be the wrong way to go.

[pal_sch]

I always find it funny that it's called the Value Added Tax, which reminds me of stuff like value-added service/benefits etc. Like some free service that came with the stuff you buy, or just by adding some extra cash you can get more of the item/service.

But VAT is just a flat tax on what you buy, and that's it. Perhaps you might get some of the benefits indirectly based on your tax money. :P

/derail
Not exactly.

To the customer it looks like a single flat sales tax, but in reality it is a tax charged at each stage of a products life only on the profit margin of each stage.

So if I ran a shop and bought a widget for £1 wholesale and sold it for £2 retail I would pay tax on the £1 value added rather than the £2 sale price. The tax on the other £1 would have been paid by the previous companies who made the widget or sold them the raw materials.

The trick is it avoids tax evasion compared to a flat sales tax. Under a sales tax only the final sale to the consumer is taxed, so if you claim you are buying something for resale there is no incentive for anyone to charge tax. Under VAT the tax is always paid and it is up to resellers to track what has previously been paid (through VAT numbers on receipts) so they only pay the taxes that are due. It makes business-to-business sales a lot simpler from a sellers point of view and there is little chance of getting caught up in someone else's fraudulent claims.

[Beethoven]

Other way around, an american in europe would have to pay vat on anything he buys here, including turbine points... so again billing adress would be the wrong way to go.

Actually, that's not entirely correct. I am a European living in the US (and thus subject to American taxation, not European). I'd be to go over there (which I do about once a year) I do not pay VAT on everything I buy there - or more accurately I pay VAT but if I produce a receipt proofing I paid tax to the customs authorities upon leaving the country, the money I paid for tax is returned to me.

It does bring up an interesting question, but I don't see why purely virtual goods wouldn't be treated the same and if they are - and they track me by IP - I end up paying VAT, then need to print out (or request) the receipt showing the VAT tax to get it back. So, in this case, using the billing address would be actually easier for everyone involved. Now, it could be virtual goods are treated different and taxation solely depends on where you buy them as opposed to taxation being dependent where your residency is, but I doubt it.

[Ducaster]

Seriously people, do you try to verify every VAT number at every store you go to?

I Probably would IF they started adding it without warning. Yes I am that careful about my money.

For the record I'm here in the US. I don't PAY VAT but I am from the UK and know just what sneakyness my old UK employers used to wriggle out of as much Tax as they could. If turbine will not learn the lesson that they can't drop price changes on their customers without warning then they deserve to examined VERY closely in my opinion.

If they have nothing to hide and I believe they don't; but have just made a P.R. hash of a necessary change to stay EURO compliant, then this will all blow over. What I want is for Turbine to have a bit more care when dealing with us - their FANS and Customers, nothing more

[Cold_Stele]

That is incorrect. If you do business in a country you must comply with their laws. Turbine is doing business in Europe and must comply with its laws.

That's the whole point though isn't it? Turbine's not doing business in Europe, Europeans are 'going' on the internetz to do business with Turbine in America.

From what I understand Turbine are complying with European law out of common courtesy (especially as they have a monopoly so they have nothing to lose).

I only know criminal law but I believe that tax law is the same - if I only physically operate within the US then your law in Europe may as well be written on TP (toilet paper, not turbine points). Europe has no jurisdiction to force a company in another continent to do anything if they don't operate there. Any legal case would fail there, it wouldn't be passed 'up the chain' to WB.

Shade's first post is worth rereading, he got it pretty much right (for once :))

[BruceTheHoon]

CC?

IP?

Billing Addr?

Take your pick.

See, the VAT tax goes to the UK. THEN the UK hands it out from there. So, if you want to know if your Country is getting it's tax from Turbine, go talk to the UK.

Would, if I could, but Turbine has made that pick (as companies usually do). I'd just like to know what method they've chosen.
My intentions, however, are not nearly as exalted as you guessed them to be. What I was wondering is if, while working abroad, would that be an appropriate time for me to stock up on the points. :)


Billing address. Why would they use IP (geo-location)? It requires far more effort and any mistake would be considered their responsibility. They use billing address and the burden of responsibility falls upon the customer. You (as customer) are supposed to provide companies with correct information. You give them wrong data, you'd be the one getting into trouble.

There is no legal requirements for companies to track of verify the information their customers provide them with. In fact, governments may not want to even encourage businesses to share information what they use as it would make it easier for them to evade taxes. I know for a fact they use billing address I could get the idea to simply use a US address to prevent having to pay VaT and hope no one ever checks.

This has been significantly more informative and interesting. Still, not a source I'd put my money on (which actually is the case) - nothing personal or offensive intended.
Thank you, nevertheless. If the information can not be obtained, I guess I'll just have to try.

[Lorien_the_First_One]

I always find it funny that it's called the Value Added Tax, which reminds me of stuff like value-added service/benefits etc. Like some free service that came with the stuff you buy, or just by adding some extra cash you can get more of the item/service.

But VAT is just a flat tax on what you buy, and that's it. Perhaps you might get some of the benefits indirectly based on your tax money. :P

/derail


You misunderstand what value they are talking about.

VAT adds to the total tax at each step value is added. It replaced manufacturer taxes (where tax was applied at point of manufacture and never again) or sales taxes (where tax was applied on specific products meaning some things weren't taxed, some were taxed multiple times and had tax hidden inside).

A VAT adds tax every time you add value
So for a simple 10% VAT:

$50 - manufacturer buys raw materials to make a product - $5 tax paid

$100 - manufactured product sold to global distributor - $10 tax paid, $5 ITC rebate to manufacturer

$150 - global distributor resells to local distributor - $15 tax paid, glob dist gets $10 input tax refund

$200 - local distributor sells to retailer - $20 tax paid, $15 tax rebate allowed

Retailer keeps some for own use - end of process - $20 total tax paid by retailer based on final sale price

OR

$300 - retailer sells to consumer - end of process - $30 total tax paid by consumer based on final sale price, $20 rebate allowed to retailer.

It's a bit more complex than that in most systems, but that's the concept. Every time value is added (good is moved, improved, sold) a net tax is created on the increase.

[Lorien_the_First_One]

That's the whole point though isn't it? Turbine's not doing business in Europe, Europeans are 'going' on the internetz to do business with Turbine in America.

From what I understand Turbine are complying with European law out of common courtesy (especially as they have a monopoly so they have nothing to lose).

I only know criminal law but I believe that tax law is the same - if I only physically operate within the US then your law in Europe may as well be written on TP (toilet paper, not turbine points). Europe has no jurisdiction to force a company in another continent to do anything if they don't operate there. Any legal case would fail there, it wouldn't be passed 'up the chain' to WB.

Shade's first post is worth rereading, he got it pretty much right (for once :))

There are two ends to an internet busines transaction, that's what makes it tricky. A bank transaction happens in one country where the buyer is, a seller is in the other. Now which country did the sale happen in? Traditionally it happens where the money is handed over. It's messy.

Also large companies need to be concerned not with just the law, but with looking like you follow the law. Picture this headline "WB American subsidiary avoiding UK taxes". Then a whole bunch of quotes from the Labour Party leader about how they are violating UK and EU law by not charging taxes and calling them out as evil, attacking foreign companies, etc. People don't dig into stories, they read headlines, maybe a short story, then they judge. Also even if WB couldn't legally be held responsible, large companies often need government favours or support - and that doesn't happen when part of your operation is seen as already ripping off the government.

It costs WB/Turbine almost nothing to collect the tax, and it covers their ass. It makes sense to do it.

[Hokiewa]

That's the whole point though isn't it? Turbine's not doing business in Europe, Europeans are 'going' on the internetz to do business with Turbine in America.

From what I understand Turbine are complying with European law out of common courtesy (especially as they have a monopoly so they have nothing to lose).

I only know criminal law but I believe that tax law is the same - if I only physically operate within the US then your law in Europe may as well be written on TP (toilet paper, not turbine points). Europe has no jurisdiction to force a company in another continent to do anything if they don't operate there. Any legal case would fail there, it wouldn't be passed 'up the chain' to WB.

Shade's first post is worth rereading, he got it pretty much right (for once :))

No. lol, no. Of course Turbine is doing business in Europe. You are mistaken. That is simply not how it works. This is not new to MMOs. VAT is charged by all the names you would recognize, either openly with a VAT charge or specifically built into a sub cost.

The real uproar will occur if Turbine opens servers up in the UK then you can enjoy the VAT on subs.

[Solmage]

From 45 seconds of googling:

http://en.wikipedia.org/wiki/Value_added_tax_identification_number

"Foreign companies that trade with non-enterprises in the EU may have a VATIN starting with "EU" instead of a country code.[1]"


What I find facinating about this process is how quickly people assume Turbine is running a scam and flout how well they know their laws and how Turbine is breaking them. Then in 45 seconds you get the answer for them lol.

Seriously people, do you try to verify every VAT number at every store you go to?

Yes, that was pretty much the gist of my message. However Turbine PR bungled this one up rather nicely, so it's not completely out of the blue for people to be upset and lash out.

I suspect that the real reason for this change is because their parent company is WB, and not because of the localization as was stated *(by them), but if it really was the localization, I do have to say wow, great job spending money to make your customers unhappy and less likely to buy stuff from you :)

And no, I'm not going to have Kriegsgeschmiedete or any other such nonsense on my screen any time soon, I'll stick to English :)

[Cold_Stele]

No. lol, no. Of course Turbine is doing business in Europe. You are mistaken. That is simply not how it works. This is not new to MMOs. VAT is charged by all the names you would recognize, either openly with a VAT charge or specifically built into a sub cost.

The important thing to remember is that Turbine never marketed in Europe nor did it run the game for European players.

When the European servers closed down players migrated their accounts onto American servers.

Personally I think the case is that Turbine is planning on having a higher European presence and getting the tax situation corrected is a logical part of that plan.

Remember the recent French/German translation - investing money in producing and supporting makes no sense if it's for existing players.

[Cold_Stele]

Thinking about it a little more - the recent translation makes no financial sense if it's for existing vet players.

We know free to play's been a huge success - I wonder if we're about to see a round of marketing in Europe, possibly the creation of a new server like Cannith/Orien to support a new f2p customers.

[Monkey_Magic]

Hmm.. Just curious.. Whats to stop someone from say buying one of those prepaid credit cards that you can get at the stores, changing their address temporarily and using a proxy to get a year subscription bulk to evade the VAT?

[Mister_Peace]

Hmm.. Just curious.. Whats to stop someone from say buying one of those prepaid credit cards that you can get at the stores, changing their address temporarily and using a proxy to get a year subscription bulk to evade the VAT?

Tax evasion laws?

Also, without a billing or shipping address for your credit card located near your DDO client's IP address, turbine won't sell you DDO points.

[Lossa]

Question: Is the VAT number EU 826 015 089 really a true and usable number? In Europe each member country of the union has its own system of VAT numbers, in Germany for example DE 123456789.

[jennick52]

From a previous post.

http://forums.ddo.com/showpost.php?p=3693540&postcount=14

[Blackbird]

That's the whole point though isn't it? Turbine's not doing business in Europe, Europeans are 'going' on the internetz to do business with Turbine in America.

From what I understand Turbine are complying with European law out of common courtesy (especially as they have a monopoly so they have nothing to lose).

I only know criminal law but I believe that tax law is the same - if I only physically operate within the US then your law in Europe may as well be written on TP (toilet paper, not turbine points). Europe has no jurisdiction to force a company in another continent to do anything if they don't operate there. Any legal case would fail there, it wouldn't be passed 'up the chain' to WB.

Shade's first post is worth rereading, he got it pretty much right (for once :))

If you only know criminal law, why are you opining on tax law? Tax and criminal law are not much alike at all. I do know tax law. It's what I do. I'm not an expert in international tax law but do have a respectable amount of knowledge about it.

You are absolutely wrong that if you are only physically located within the US then the tax laws of Europe do not apply. I will give you an example using US tax law.

A Saudi citizen lives in Saudi Arabia (I use Saudi Arabia because we do not have an income tax treaty with Saudi Arabia so there are no treaty exceptions which will apply). The Saudi has never stepped foot inside the US. He decides to purchase some Google stock, so he goes on the internet and a few clicks later he owns Google stock. 6 months later, Google pays a dividend. The US will withhold a 30% income tax on that dividend before the Saudi is permitted to get the dividend. The Saudi has never stepped foot in the US and has only used the internet to purchase something yet he is subject to US tax. Why? He has US source income. Google is a US company and dividends from a US company are US source income. The cite is 26 U.S.C. sections 861(a)(2) (sourcing) and 1441 (withholding) if you don't believe me.

You know what is also US source income? Sales where title passes in the US (this applies regardless of the nationality of the buyer and seller -- so a Norwegian could sell something to a Brazilian and if title passage took place in the US then the Norwegian has US source income even if he's never been to the US). Sales of inventory-type items are subject to the effectively connected with a US trade or business laws and require a little more than a one time sale. But, if the Saudi was regularly selling widgets to customers in the US with title passing in the US he would be deemed to be engaged in a US trade or business and subject to income tax on those earnings. This is exactly what Turbine is doing in Europe. Regularly making sales to European customers. There could be some argument as to where title passes since it's the internet but they are regularly making sales to European customers. Title passage is also a US tax law concept and I don't know what the EU laws are in that regard. This is 26 U.S.C. sections 864(c) (US trade or business) and 861(a)(6) (sourcing).

Therefore, Turbine is doing business in Europe. It is selling its products into Europe. This is not a case where Turbine only intends to operate in the US and a few European players make purchases. Turbine is soliciting European players. It is making language accommodations and sent emails soliciting European players to come back to play the game after the European servers shut down.

I don't believe for a second Turbine is collecting VAT out of some sort of courtesy. If you scroll back, I believe someone posted the EU Commissions laws regarding how you collect VAT if you are a non-EU company selling into Europe. Also, Turbine's VAT number has a prefix specifically for non-EU company. Why would the law and the prefix even exist if non-EU companies were not subject to EU law and required to collect VAT? Because they might want to do it for fun? Please.

You say -- well, it must be for fun because they can't enforce it because Turbine is in the US. Sure they can, it's called comity. Additionally, there are many treaties between countries regarding tax enforcement. Laws would be completely worthless if you couldn't enforce them beyond your borders. For criminal law we have extradition. For tax, we have cooperation treaties. After all, if a US citizen subject to US tax could walk across the border into Canada and avoid paying the taxes he owed then what would be the point? Everyone would just rack up a ton of tax debt and then leave the country. As for how they actually enforce it, I'm not 100% sure. There are cooperation treaties and Turbine or WB likely have assets in Europe which could be frozen. I do not know whether the cooperation treaties would permit the US to collect the tax and remit it to the applicable European authority. I do know that in the US, you can take a valid foreign court judgment and register it with a US court and then enforce it as if it was the judgment of a US court (comity). So, in theory, a European court could render judgment against Turbine and then seek to have it enforced in the US.

By way of example, the US was able to enforce its laws against UBS, a Swiss bank who, pursuant to SWISS bank secrecy laws, was not reporting to the US the Swiss accounts of its US citizens/residents (and by resident I mean, for example, a UK citizen living in the US) account holders. These accounts were located in Switzerland, not the US, yet the US was able to get those accounts and the income from them disclosed despite what the Swiss bank secrecy laws said.

[Lorien_the_First_One]

Yes, that was pretty much the gist of my message. However Turbine PR bungled this one up rather nicely, so it's not completely out of the blue for people to be upset and lash out.

I suspect that the real reason for this change is because their parent company is WB, and not because of the localization as was stated *(by them), but if it really was the localization, I do have to say wow, great job spending money to make your customers unhappy and less likely to buy stuff from you :)

And no, I'm not going to have Kriegsgeschmiedete or any other such nonsense on my screen any time soon, I'll stick to English :)

Oh I agree with you totally. Adding optional language choices shouldn't have triggered anything under tax law. Something else is at issue. And yes, they bungled the PR on this. I'm sorry to say the Turbine, through its practice of silence and surprise, frequently shoots itself in the food. I have rarely seen a company with such a poor approach to PR. I don't blame the front end of the PR machine such as the CR managers on the forums, but whoever heads up PR for Turbine in general doesn't have a clue. They need to learn to be proactive, to communicate openly, to practice transparency whenever possible, to be seen as responsivive when needed, and to always not just do the right thing, but to been SEEN as doing the right thing.

This whole thing could have played out another way, like:

- one month in advance a statement comes out from Turbine "based on our move to actively assume marketting and promotion and sales of DDO in Europe we have been advised that under tax treaty X, section Y we will be required to start charging VAT on sales to European customers. Under section Z we have determined that we will elect to register for for distance selling to be deemed sales from the UK. This means all EU customers will be charged VAT at the UK rate of 20%. At this time it was determined will will not be required to charge VAT on VIP subs."

That wouldn't have been hard. It would also have been wise to actually put the VAT on the receipts with the VAT #, and to not combine the charging of VAT with other changes, such as the introduction of locally priced packages with the associated exchange difference. That could have been down 2 weeks before or after, to aid transparency. (And that should have included a statement on how foreign rates are calculated such as "based on the average exchange rate at time of implimentation plus 3%, and subject to periodic review)

[Cold_Stele]

If you only know criminal law, why are you opining on tax law? I do know tax law. It's what I do. I'm not an expert in international tax law but do have a respectable amount of knowledge about it.

You are absolutely wrong that if you are only physically located within the US then the tax laws of Europe do not apply. I will give you an example using US tax law.

A Saudi citizen lives in Saudi Arabia (I use Saudi Arabia because we do not have an income tax treaty with Saudi Arabia so there are no treaty exceptions which will apply). The Saudi has never stepped foot inside the US. He decides to purchase some Google stock, so he goes on the internet and a few clicks later he owns Google stock. 6 months later, Google pays a dividend. The US will withhold a 30% income tax on that dividend before the Saudi is permitted to get the dividend.

Stopped reading there because you're approaching this from an completely ethnocentric POV and aren't grasping the international issues.

In your example above America witholds tax because it's protecting it's own interests by doing so.

What we're talking about here is a US company collecting a tax on behalf of a foreign government and receiving absolutely nothing to recompense them for the administrative costs incurred.

As I said, my suspicion is that this is linked to the French/German translation released a couple of weeks ago. My thought is an imminent f2p release in Europe.

[pal_sch]

What we're talking about here is a US company collecting a tax on behalf of a foreign government and receiving absolutely nothing to recompense them for the administrative costs incurred......and the right to continue trading in that country without legal action being taken against them.

[Cold_Stele]

...and the right to continue trading in that country without legal action being taken against them.

No no you're right, here in the UK we just launched a huge campaign targetting American companies selling virtual currency capable of buying larger than normal ingredient bags in a computer game. No wonder they rushed doing this.

Or we could look at the facts -

1. DDO goes f2p, profits soar.
2. DDO Eu players join DDO, no tax for a year(?)
3. DDO invests money for translations into French/German - WHY? For 5 year DDO vets? Of course not
4. 2 weeks later DDO ensures it's operating by the correct VAT laws in Europe.
5... ?

[Blackbird]

Stopped reading there because you're approaching this from an completely ethnocentric POV and aren't grasping the international issues.

In your example above America witholds tax because it's protecting it's own interests by doing so.

What we're talking about here is a US company collecting a tax on behalf of a foreign government and receiving absolutely nothing to recompense them for the administrative costs incurred.

As I said, my suspicion is that this is linked to the French/German translation released a couple of weeks ago. My thought is an imminent f2p release in Europe.

It's not ethnocentric. I am a *US* tax lawyer. Therefore, I only really know *US* tax law. It only makes sense for me to provide examples of how *US* law works. You stated that a US company could not be made collect VAT because of jurisdictional issues. I gave examples (the one you stopped at and ones later) showing how the US taxes foreign persons who are not physically located in the US. If the US can do it, other countries can as well. Then I provided information about how comity allows foreign governments to enforce their laws in other countries including an example of how a Swiss company was required to comply with US laws regarding Swiss bank accounts located in Switzerland. That would be a Swiss company complying with US law and "receiving absolutely nothing to recompense them for the administrative costs incurred". In fact, I think they had a criminal charge entered against them but the DOJ I think has agreed not to prosecute in exchange for future civil compliance. But wait...you said they couldn't enforce their laws in other countries. Tell that to UBS.

I also gave examples of how Turbine is soliciting customers in the EU and marketing to them but ....wait....you didn't read that either.

You are the one who says you don't know anything about tax law and then proceed to make blanket statements based on your understanding of criminal law (which is in no way related to tax). Turbine does not have to "release" in Europe to be required to collect VAT. They are making sales on a regular basis to customers in the EU. That's probably all that's required. Why on earth would Turbine "release" in Europe when it just went through all the effort of transferring all the European players over from Codemasters and setting up foreign language forums here? If they were planning on releasing in Europe as a separate system/servers from the US servers then why go through all that expense and hassle? Just wait a bit and do it all at one time. Saves a ton of money and hassle. People in the EU can play the game now. Why does Turbine need to change anything?

[Caeldos]

So....

Going to the European Commission homepage (http://ec.europa.eu/index_en.htm), navigating to Taxation and Customs Union (http://ec.europa.eu/taxation_customs/index_en.htm) there is a service for validating EU VAT numbers missued by EU member states (http://ec.europa.eu/taxation_customs/vies/vieshome.do).

The provided VAT number is invalid according to the EU provided validation tool.

Now, each member state has different numbers they assign, and they each begin with the issuers two character country code. As such there are no VAT numbers beginning with EU xxx xxx xxx.



[Edit] Typo fixed

[Khurse]

So....

Going to the European Commission homepage (http://ec.europa.eu/index_en.htm), navigating to Taxation and Customs Union (http://ec.europa.eu/taxation_customs/index_en.htm) there is a service for validating EU VAT numbers missued by EU member states (http://ec.europa.eu/taxation_customs/vies/vieshome.do).

The provided VAT number is invalid according to the EU provided validation tool.

Now, each member state has different numbers they assign, and they each begin with the issuers two character country code. As such there are no VAT numbers beginning with EU xxx xxx xxx.



[Edit] Typo fixed

To bad you haven't actually read the thread
From the first page

From 45 seconds of googling:

http://en.wikipedia.org/wiki/Value_added_tax_identification_number

"Foreign companies that trade with non-enterprises in the EU may have a VATIN starting with "EU" instead of a country code.[1]"



http://forums.ddo.com/showpost.php?p=3693540&postcount=14

[Blackbird]

All quotes from the following (emphasis added):

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000922&propertyType=document


No no you're right, here in the UK we just launched a huge campaign targetting American companies selling virtual currency capable of buying larger than normal ingredient bags in a computer game. No wonder they rushed doing this.

"You are eligible to use the Special Scheme if:

* you supply electronically supplied services to consumers (private individuals and non-business organisations) belonging in the EU
* you are not established within the EU
* you are not registered for VAT under the normal rules in any Member State"

There is also a specific example of a US company collecting VAT on its customers located in the UK, Italy, and Spain.

For a definition of "electronically supplied services" -- http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000907&propertyType=document

but it includes such things as:

"Downloads of games onto PCs, mobile phones, and so on. Accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are remote from one another."


As such there are no VAT numbers beginning with EU xxx xxx xxx.


"Identification numbers for the Special Scheme have their own unique format beginning with the prefix 'EU', followed by a nine digit number. These are different from VAT registration numbers issued under the normal rules." Quoted from the first link above.

[lekkus]

But wait...you said they couldn't enforce their laws in other countries. Tell that to UBS.

Not for other nations doing business with USB no. For wealthy Americans evading taxes through offshore accounts at UBS, yes. Other accounts were not affected.

[Beethoven]

It's been pointed out a few times now:


From 45 seconds of googling:

http://en.wikipedia.org/wiki/Value_added_tax_identification_number

"Foreign companies that trade with non-enterprises in the EU may have a VATIN starting with "EU" instead of a country code.[1]"


Turbine was assigned a VAT number which begins with EU because Turbine is located in the United States, not in an EU member state. VAT numbers starting with EU cannot be verified by the usual VAT validation services such as VIAT.

However, you research VAT numbers starting with EU it's not hard to find out that Mutual Assistance Offices (sub department of the local VAT collection agency) in each EU country can verify such numbers from a database available /only/ to those offices. So, in other words, you live in an EU country and wish to verify Turbine's VAT number, you would need to contact your country's Mutual Assistance Office and ask them to verify the number using their database.

Note the same holds true for /every/ company that has no physical presence in the EU but is required to file for VAT not just Turbine.

[Blackbird]

Not for other nations doing business with USB no. For wealthy Americans evading taxes through offshore accounts at UBS, yes. Other accounts were not affected.

I really don't understand your point here. Is your point that the US did not require disclosure of accounts not subject to US tax? Yes. Why would they? Is your point that countries other than the US could not enforce their laws in other countries? If so, that is not necessarily true. I have no idea what other countries' laws are. For all I know, certain foreign countries may have specific laws prohibiting their own government from enforcing things outside its own borders.

But, as I said in my previous post, if a foreign person has a valid judgment against a US person, they can register that court decision with a US court and enforce it as if it were the judgment of a US court. So....if a UK person validly sues (i.e. the UK court has jurisdiction) a US person in UK court and gets a judgment, the UK person could register it with the US court that has jurisdiction over the US person and have it enforced -- i.e. the UK person could force a judicial sale of the US person's property to get paid. This is an example of UK law being enforced in the US. It's called comity.

http://en.wikipedia.org/wiki/Comity

[Cold_Stele]

Not for other nations doing business with USB no. For wealthy Americans evading taxes through offshore accounts at UBS, yes. Other accounts were not affected.

Sorry Blackbird but you're posting huge chunks of text that have little relevance to this subject and I may be missing relevant points skimming through your posts.

One of your examples was how the US taxes for it's own benefit, another how a Swiss owned bank with a physical bricks and mortar presence within the US was prosecuted/threatened with prosecution for being an accessory to US tax evasion. They were physically present within the US and have to follow US law.

For what it matters I'm not saying that Turbine aren't obliged to take VAT. I'm saying that they haven't bothered until recently, when it looks like a European marketing push is about to happen.

Can you think of another reason for the translation release a couple of weeks ago?

What would you say the reason for not collecting VAT for a year was? They were either ignorant, or advised by professionals that there was no reason to go through the expense of complying with the foreign law.

[Beethoven]

You consider European (and particularly Swiss) Privacy Laws and the example becomes extremely relevant, to me anyway. Also relevant and certainly easier to understand:


I don't believe for a second Turbine is collecting VAT out of some sort of courtesy. If you scroll back, I believe someone posted the EU Commissions laws regarding how you collect VAT if you are a non-EU company selling into Europe. Also, Turbine's VAT number has a prefix specifically for non-EU company. Why would the law and the prefix even exist if non-EU companies were not subject to EU law and required to collect VAT? Because they might want to do it for fun? Please.


Can you think of another reason for the translation release a couple of weeks ago?


Marketing. Turbine may well plan to launch additional marketing campaigns in Europe and for that reason want to make double-sure they are compliant with EU laws. The larger Turbine's business in Europe grows the larger the chance national tax authorities will look more closely.

[lekkus]

You consider European (and particularly Swiss) Privacy Laws and the example becomes extremely relevant, to me anyway. Also relevant and certainly easier to understand:





Marketing. Turbine may well plan to launch additional marketing campaigns in Europe and for that reason want to make double-sure they are compliant with EU laws. The larger Turbine's business in Europe grows the larger the chance national tax authorities will look more closely.

15.000 US citizen who defraud the US, having $20 billion in untaxed assets abroad is hardly relevant to Europeans playing and paying micro transactions VAT free for 18 months already (..) but all the sudden & unannounced have to pay UK-VAT (6% more than the country I am in) just because there is now a client they copied from the old - Codemaster one and a French/ German section on the forum without any further explanation. Owkay ;)

[Blackbird]

For what it matters I'm not saying that Turbine aren't obliged to take VAT. I'm saying that they haven't bothered until recently, when it looks like a European marketing push is about to happen.



From what I understand Turbine are complying with European law out of common courtesy (especially as they have a monopoly so they have nothing to lose).

I only know criminal law but I believe that tax law is the same - if I only physically operate within the US then your law in Europe may as well be written on TP (toilet paper, not turbine points). Europe has no jurisdiction to force a company in another continent to do anything if they don't operate there. Any legal case would fail there, it wouldn't be passed 'up the chain' to WB.

??

So, you say now that they may be legally obligated to collect VAT but before you said they were only collecting out of common courtesy because Europe couldn't require Turbine to collect VAT. Which is it?


Stopped reading there....



Sorry Blackbird but you're posting huge chunks of text that have little relevance to this subject and I may be missing relevant points skimming through your posts.

So my posts are irrelevant? How do you know if you can't be bothered to read them?

[pal_sch]

What would you say the reason for not collecting VAT for a year was?I strongly doubt that they haven't been paying VAT on these sales before, even if they hadn't declared it.

Unless someone has evidence that they haven't been paying VAT in previous years I wouldn't make this claim. Remember that they haven't clearly labelled VAT even now we know they are charging it, so I have no reason to believe they haven't been paying it previously, even if they weren't changing the price to reflect the taxes paid.

Lots of UK companies have kept their end prices the same even when VAT has increased, absorbing the extra 2.5% tax as a cost rather than passing it onto the customers. My guess is that Turbine have been doing similar with the entire cost for whatever reason.

[karl_k0ch]

Unless someone has evidence that they haven't been paying VAT in previous years I wouldn't make this claim. Remember that they haven't clearly labelled VAT even now we know they are charging it, so I have no reason to believe they haven't been paying it previously, even if they weren't changing the price to reflect the taxes paid.

Since I am using the store until now, they have declared on the invoice that the VAT is indeed 0 Euros, or Dollars, for that matter.

[Cold_Stele]

I strongly doubt that they haven't been paying VAT on these sales before, even if they hadn't declared it.

Unless someone has evidence that they haven't been paying VAT in previous years I wouldn't make this claim. Remember that they haven't clearly labelled VAT even now we know they are charging it, so I have no reason to believe they haven't been paying it previously, even if they weren't changing the price to reflect the taxes paid.

Lots of UK companies have kept their end prices the same even when VAT has increased, absorbing the extra 2.5% tax as a cost rather than passing it onto the customers. My guess is that Turbine have been doing similar with the entire cost for whatever reason.

A company cut profits by 20% and sends that money to a foreign government rather than rightfully passing the tax onto the customer?

That's just too silly for words.

[Cold_Stele]

??

So, you say now that they may be legally obligated to collect VAT but before you said they were only collecting out of common courtesy because Europe couldn't require Turbine to collect VAT. Which is it?

It's exactly what I said before.

Europe have legislated about VAT in European courts. If Turbine was in as much potential trouble from European law as you suggest then they wouldn't have waited 18 months to correct the situation, don't you agree?

Their choice to facilitate collection of the tax now would appear to be a prelude to expanding European operations.


So my posts are irrelevant? How do you know if you can't be bothered to read them?

You went into a great deal of detail about two examples. Were they irrelevant yes or no?

Clue -

Example 1 was about a US company taxing internet purchases because it's US law. Nothing to do with this situation.

Example 2 was a Swiss owned company physically based in the US being prosecuted. Again, nothing to do with this situation.

Forgive me if I stopped reading your very lengthy posts in any kind of detail after that.

[Blackbird]

It's exactly what I said before.

Europe have legislated about VAT in European courts. If Turbine was in as much potential trouble from European law as you suggest then they wouldn't have waited 18 months to correct the situation, don't you agree?

Their choice to facilitate collection of the tax now would appear to be a prelude to expanding European operations.



You went into a great deal of detail about two examples. Were they irrelevant yes or no?

Clue -

Example 1 was about a US company taxing internet purchases because it's US law. Nothing to do with this situation.

Example 2 was a Swiss owned company physically based in the US being prosecuted. Again, nothing to do with this situation.

Forgive me if I stopped reading your very lengthy posts in any kind of detail after that.

If by great deal of detail, you mean a grand total of 2 short paragraphs, then yes. Less than half my post was dedicated to those examples. They were meant to illustrate how the US can tax companies or individuals located in foreign countries when those companies or individuals never enter the US. In fact, my 2nd example was NOT about UBS but was about a foreign company selling products into the US from abroad. You say they're irrelevant because they are based on US law, not EU law. They were meant to show that it is possible for a country to tax foreign persons that never physically step foot inside the country. Since I am familiar with US law, I based examples on US law. They are not invalid because of that. They are illustrations to prove a general, not a specific, point.

I then went into an explanation that others have posted about the EU commission's laws regarding non-EU sellers collecting VAT. I also explained comity and how it works. The fact that you chose not to read the whole post, or didn't understand it, does not make my post irrelevant. In another post I specifically quoted UK law (where you are located) showing that non-EU businesses must collect VAT on e-commerce sales. I guess that is irrelevant too?

You are up in arms because they didn't collect it for 18 months and now are. There is no rationale basis for it. If you accept that they are required to collect it, what difference does it make that they did not before hand? Maybe there is a threshold of activity before they were required to or maybe they weren't complying with Eu law and got in trouble. The point is, we don't know. Myself and others have pointed to specific official websites that detail how a non-EU business is supposed to collect VAT. The fact that they didn't before is completely irrelevant. If you don't like you're country's laws then you should petition to change them. Don't complain when someone complies with them.

[Winter_storm]

I know nothing of the VAT thing. But the GEO ID is not very hard to determine.

Each country and ISP has identifiers that can be read to find your location down to ISP service and your known IP Address Number (from your modem or Computer) (not your physical address).

If I go to another country and try to access a website or let say make a VOID internet phone call I could get a denied service since I'm calling or accessing from a different country according to the identifiers.

The general public cannot normally see this info unless you go to a website (like here http://whatismyipaddress.com/)

So Turbine can control the VAT charges to certain locations in the world. How they do it is up to them.

[Cold_Stele]

If by great deal of detail, you mean a grand total of 2 short paragraphs, then yes. Less than half my post was dedicated to those examples. They were meant to illustrate how the US can tax companies or individuals located in foreign countries when those companies or individuals never enter the US. In fact, my 2nd example was NOT about UBS but was about a foreign company selling products into the US from abroad. You say they're irrelevant because they are based on US law, not EU law. They were meant to show that it is possible for a country to tax foreign persons that never physically step foot inside the country. Since I am familiar with US law, I based examples on US law. They are not invalid because of that. They are illustrations to prove a general, not a specific, point.

I then went into an explanation that others have posted about the EU commission's laws regarding non-EU sellers collecting VAT. I also explained comity and how it works. The fact that you chose not to read the whole post, or didn't understand it, does not make my post irrelevant. In another post I specifically quoted UK law (where you are located) showing that non-EU businesses must collect VAT on e-commerce sales. I guess that is irrelevant too?

You are up in arms because they didn't collect it for 18 months and now are. There is no rationale basis for it. If you accept that they are required to collect it, what difference does it make that they did not before hand? Maybe there is a threshold of activity before they were required to or maybe they weren't complying with Eu law and got in trouble. The point is, we don't know. Myself and others have pointed to specific official websites that detail how a non-EU business is supposed to collect VAT. The fact that they didn't before is completely irrelevant. If you don't like you're country's laws then you should petition to change them. Don't complain when someone complies with them.

Again your examples. They're not irrelevant because they're based on US law - they're irrelevant because collecting tax for your own country is a completely different scenario to collecting it on behalf of another. No one disputes the danger of messing with the tax system of any country you're physically based in.

Before I look at the rest of your post I would appreciate the courtesy of an answer to my questions as I have done yours.

Oh and you're mistaking 'being up in arms' for 'working this weekend'. If I wasn't working I wouldn't be wasting my weekend on the forums...

[SisAmethyst]

I know nothing of the VAT thing. But the GEO ID is not very hard to determine.

Each country and ISP has identifiers that can be read to find your location down to ISP service and your known IP Address Number (from your modem or Computer) (not your physical address).

If I go to another country and try to access a website or let say make a VOID internet phone call I could get a denied service since I'm calling or accessing from a different country according to the identifiers.

The general public cannot normally see this info unless you go to a website (like here http://whatismyipaddress.com/)

So Turbine can control the VAT charges to certain locations in the world. How they do it is up to them.

I am sorry an IP is something purely virtual and not necessarily bound to a physical location. Someone from Europe could theoretically buy an IP address from an US seller. That is by the way exactly what those video proxies do to be able to view US broadcast shows via Internet without being physically in the US. The broadcast service is checking your IP, see that this is registered at an US company and thats it. It is nearly impossible to track down from where exactly a network package came from.

A network package is send from location X into the network without a fixed way-point. This package could either go once around the world via Russia, china over the pacific to the US or from Europe through the Atlantic over to the US. There is no way you can predict how it goes. Thats a benefit from the structure of the Internet as it works even if you would cut the cable in the Atlantic!

So based on the IP you can't control anything, you can just guess. Therefore it is much safer to ask the customer for the billing address and use this information.

[Blackbird]

Before I look at the rest of your post I would appreciate the courtesy of an answer to my questions as I have done yours.

What questions? These questions? I didn't really answer because I don't know the answer. Only Turbine could answer these. But, since you want me to speculate about something I have no knowledge about -- Answers in red.



Can you think of another reason for the translation release a couple of weeks ago? Maybe they wanted to provide a language option to people who don't speak English well? They solicit European players and the fact that everything is in English may be a barrier for some people. They have French and German forums and have since they advertised they were going to import the European characters from the old Codemaster servers. So, it would make sense that they have French and German clients to go along with French and German forums. If someone doesn't speak English well then they need both client and forums to really get full benefit.

What would you say the reason for not collecting VAT for a year was? They were either ignorant, or advised by professionals that there was no reason to go through the expense of complying with the foreign law. As stated earlier, I have no idea why they weren't collecting the VAT. I'm in no way a VAT expert and I'm not that knowledgeable about it or EU laws. I don't work for Turbine and couldn't possible speculate as to their reasons.

[Cold_Stele]

And this one?


Europe have legislated about VAT in European courts. If Turbine was in as much potential trouble from European law as you suggest then they wouldn't have waited 18 months to correct the situation, don't you agree?

Their choice to facilitate collection of the tax now would appear to be a prelude to expanding European operations.

[Blackbird]

And this one?

That question is very similar if not the same as the previous question as to why they didn't collect for a year. If your question is why they didn't comply earlier, I can't answer that. I have met more people than I can count that haven't complied with their tax obligations for varying amounts of time, including decades. I couldn't tell you why they didn't either. Most of the time they couldn't give an answer more than "it was a hassle and I didn't want to deal with it". In those cases, I could say affirmatively that they had an obligation and did not meet it. As for Turbine, I do not know what the VAT requirements are. I know that they say they have to collect VAT and people (including myself) have posted links that are consistent with that statement (i.e. UK websites providing procedures on how a non-EU business with no physical location in the EU can collect and remit VAT) and it is consistent with my knowledge of tax law (i.e. my example of how the US law applies to taxes in international contexts).

Additionally, arguably Turbine didn't actively solicit European players until it solicited the former Codemaster clients and offered to transfer over their characters. That wasn't too long ago. I don't think they did before then but could be wrong. I've honestly never seen advertisements for DDO here in the US. I have to image there are requirements of affirmative action on the part of Turbine to be subject to tax (selling into Europe on a regular basis, soliciting European customers, etc) but maybe not. Under US law they *probably* wouldn't have been seen as engaged in a US trade or business (if they were foreign) until they started actively soliciting US customers (as opposed to US customers finding them on their own and placing sporadic orders) without anything more but it's a facts and circumstances test and it would be a close call.

As for why I use examples and illustrations -- I often find people can understand those better because it allows people to see a specific situation. I could cite law for you, that would be very hard to understand. VAT is closer to a sales tax then an income tax. There is no federal sales tax in the US so there is no way I could provide a US law example of that since the only sales tax in the US is state and there are constitutional limits on the state's ability to require its collection. So, if you don't like example 1, example 2 was much better because it involved solely a foreign person having to pay on their own. Not going to be exact because the taxes are dissimilar. The examples were merely provided to show how domestic tax law can operate in an international context and for that I think they were very relevant.

[Rumbaar]

It's sad that the localization, with no real benefit to the customer [they all had to deal with English for months already], has resulted in higher prices for goods you were paying less for just a few weeks ago.

This can only be seen as a step backwards for European players, coupled with how long it's taken to get your characters across and fully functional is just another slap in your faces.

In a way I'm 'lucky' Turbine doesn't acknowledge Australasia ... or I might unnecessarily be paying more for my Turbine Points as well. But they'd certainly never get a cent out of me if and when that happens.

[Lorien_the_First_One]

It's sad that the localization, with no real benefit to the customer [they all had to deal with English for months already], has resulted in higher prices for goods you were paying less for just a few weeks ago.

I really doubt that's the issue.

[lekkus]

As for why I use examples and illustrations -- I often find people can understand those better because it allows people to see a specific situation. I could cite law for you, that would be very hard to understand. VAT is closer to a sales tax then an income tax. There is no federal sales tax in the US so there is no way I could provide a US law example of that since the only sales tax in the US is state and there are constitutional limits on the state's ability to require its collection. So, if you don't like example 1, example 2 was much better because it involved solely a foreign person having to pay on their own. Not going to be exact because the taxes are dissimilar. The examples were merely provided to show how domestic tax law can operate in an international context and for that I think they were very relevant.

You can stamp as much as you want on the floor declaring "..but the law", and "I am right because the law..etc" but, while I understand where you're coming from, an aspiring lawyer, you forget one thing. I am not a company, I am not a bank, I am not the RSI. No, I was a paying customer, and you may think what customers think, or if they ask why now, is all irrelevant 'because of the law' but then I would suggest not to venture in marketing ;)

[Blackbird]

You can stamp as much as you want on the floor declaring "..but the law", and "I am right because the law..etc" but, while I understand where you're coming from, an aspiring lawyer, you forget one thing. I am not a company, I am not a bank, I am not the RSI. No, I was a paying customer, and you may think what customers think, or if they ask why now, is all irrelevant 'because of the law' but then I would suggest not to venture in marketing ;)

Not aspiring. I am a lawyer. I am a LL.M. student but i am already a lawyer. I can understand that people are frustrated that the prices went up without notice. But, that doesn't mean Turbine is doing anything illegal. Everyone kept insisting Turbine "couldn't" collect VAT or was keeping the money for themselves. This is the issue. I never said Turbine handled this the best way possible (I completely agree they should have given advance notice), only that they are likely following the law, not trying to cheat European players and pad their pockets. It's like blaming your CPA when you owe taxes. Don't shoot the messenger. That's what people were trying to do. Does it suck you have to pay more? Yes, but it's not Turbine's fault. People always yell "it's not fair" and "if I don't like it it must be illegal" when something happens they don't like. I'm sure I've done it myself. But, that doesn't mean I was right when I did it.

[Rumbaar]

I really doubt that's the issue.So what is the issue then? Can these people set their location to the US and pay the same prices they were just a week or so ago, for the same game they were playing then?

I guess they have a local phone number and support for their region now, to justify their VAT. But I'm glad I do not have a 'local' version for any increase in price.

[PopeJual]

Edit: Deleted comments since the thread had progressed quite a bit since the post I was quoting. Don't know why I couldn't see the rest of the thread when I hit quote there.

[Lorien_the_First_One]

So what is the issue then? Can these people set their location to the US and pay the same prices they were just a week or so ago, for the same game they were playing then?

I guess they have a local phone number and support for their region now, to justify their VAT. But I'm glad I do not have a 'local' version for any increase in price.

Turbine doesn't gain from charging the VAT you know. They did it for a reason.

Odds are either:
1) they should have been charging since they took over from codematers and didn't think about it until someone approached them or some legal guy internally realized the boo boo (and they will NEVER admit this or it would cost them a fortune)
2) they are about to expand operations and now feel that they will trigger the requirement to pay
3) a bit of each - they always knew they should have been charging VAT but figured they were smalltime enough not to be noticed, and because of (2) above they figure they are about to pop onto people's radar (once again, they can NEVER admit this)
4) someone at WB is aware from their government connections in some country that one EU partner is about to crack down and they want to get in and on "safe ground" on their own terms, not what some court decides

[Beethoven]

You can stamp as much as you want on the floor declaring "..but the law", and "I am right because the law..etc" but, while I understand where you're coming from, an aspiring lawyer, you forget one thing. I am not a company, I am not a bank, I am not the RSI. No, I was a paying customer, and you may think what customers think, or if they ask why now, is all irrelevant 'because of the law' but then I would suggest not to venture in marketing ;)


Why not? You ask any company why they collect taxes and their answer is likely ultimately going to boil down to "because it's the law." Why else would they? Because they are trying to be funny?

Posters alleged there is no legal obligation for Turbine to collect VAT and since they have no physical office in Europe, European authorities could not enforce their tax law upon them. Several other posters have tried to dispel this misconception, posted links to actual legal text stating the opposite and gave examples of multi-national cooperation in regards to tax evasion.

Also, Blackbird never said it is irrelevant why they did not collect (or charge) VAT before, he said:


I didn't really answer because I don't know the answer.

I am not sure how someone not knowing the answer to a single question makes his answers to other questions irrelevant or wrong. We limit the forums to only those who have full knowledge of every detail of a matter discussed and the place would probably be very empty.

[Rumbaar]

Turbine doesn't gain from charging the VAT you know. They did it for a reason.

Odds are either:
1) they should have been charging since they took over from codematers and didn't think about it until someone approached them or some legal guy internally realized the boo boo (and they will NEVER admit this or it would cost them a fortune)
2) they are about to expand operations and now feel that they will trigger the requirement to pay
3) a bit of each - they always knew they should have been charging VAT but figured they were smalltime enough not to be noticed, and because of (2) above they figure they are about to pop onto people's radar (once again, they can NEVER admit this)
4) someone at WB is aware from their government connections in some country that one EU partner is about to crack down and they want to get in and on "safe ground" on their own terms, not what some court decidesYes I'm aware Turbine, should not, does not make any monies from this. As they are just the middle man for the transfer of taxes.

But unless laws have changed, their operation as a supplier of online content to an international market has not changed with just language localization. So unless laws have changed, I can't see the legal need for Turbine to do so from this arbitrary start point.

You think Turbine would have learnt from their Offer Wall days and had better PR with their customers. But as it's a non US issue, most don't really care.

[PopeJual]

You think Turbine would have learnt from their Offer Wall days and had better PR with their customers.

If Turbine were any good at things like that, then they wouldn't have had the Offer Wall in the first place.

Turbine is outstanding at doing some things. They ain't so good at dealing with customer feedback or anticipating customer reactions.

[EustaceTrevelyan]

Enhancing the game by raising the prices. That's an interesting way of putting it. It's not like we were unable to play before...

Isn't this thread about the VAT? Which is european, and nothing to do with Turbine, a division of WB, an American co? *confused*

(Totally off-topic, but i've never understood the VAT. Not what it is, but why have such a regressive tax in the first place?)

[Lorien_the_First_One]

Yes I'm aware Turbine, should not, does not make any monies from this. As they are just the middle man for the transfer of taxes.

But unless laws have changed, their operation as a supplier of online content to an international market has not changed with just language localization. So unless laws have changed, I can't see the legal need for Turbine to do so from this arbitrary start point.

You think Turbine would have learnt from their Offer Wall days and had better PR with their customers. But as it's a non US issue, most don't really care.

You didn't actually read any of what I said did you?

[Argila]

I would like to point again to something other mentioned in one of the closed topics about this...

The site GOG.com, a place where you can buy classic games, haves this:

"Fair Price Package: All customers paying in euros receive a store credit in USD for the price difference between European & worldwide price."

(http://www.gog.com/en/page/tw2v2)

This would appease the European consumers and, even if it is not Turbine fault, reduce the penalty in the TP costs for European costumers.
I also don't believe this would be much penalizing for Turbine and it could even increase the European selling of TPs.

[Smitey]

We are excited to begin offering a full-fledged service to Europe

Could you outline the plans Turbine has regarding EU customer support times and expanded payment options for EU customers please QuarterMaster?

1.) Will the terms of refunds be modified to fully reflect UK law for EU players?
i.e. Distance selling (http://www.oft.gov.uk/about-the-oft/legal-powers/legal/distance-selling-regulations/)

2.) Will VAT rates be further split into ENG/DE/FR as per the client; further refined to be EU-member specific or left as one flat EU rate thats presumably using UK rate?

3.) Are Turbine negotiating with tax advisors to ensure the entire store system falls under the scope of VAT? I would suspect not all items are considered DLC under tax definitions.


I'm sure European players would appreciate this information in light of the extra costs incurred as a result of the VAT payments.


I assume the tax reasons VAT is being applied at all is down to the premium model so that Turbine points used to unlock 'game content' has the tax collected?

- the problem is this 'catch-all' affects all purchases, be it consumables or ancillary items rather than just the taxable purchases that fall under "electronically supplied services" i.e. the game content of adventures packs and races/classes.


My further questions are:

i) Will existing VIP subscriptions be taxed?

ii) Will new subscriptions be taxed?

iii) Are Turbine investigating if all points purchases are taxable or if a two-tier system could be implemented for major game content vs incidentals? (cosmetic kits, for example)

iv) What incentives are Turbine considering for the european players so that TP are still attractive as an ongoing revenue stream? (EU-specific coupons perhaps?)

* I anticipate some may say 'take it up with your government, nothing to do with Turbine' but as a business Turbine should be aware by the previous comments and threads that those players who use the store for non-essential goods may be dissuaded by the recent increased costs now associated with TP bundles. If they are looking to expand into Europe and market the game now is the time to evaluate this type of issue.


EU Free to play players -> Not impacted if they remain entirely F2P

EU Premium players -> impacted as new content arises if TP balance is zero

EU VIP players -> unknown impact on subs as no official announcement; impacted on items additional to that provided as part of VIP service.



Previously as a VIP I've frequently bought bundles for non-essential items/try things out/tweak alts but the VAT will give pause next time I consider buying points given exchange rates and fees/charges on top - none of which is Turbine's responsibility but they need to be aware of is a deterrant to me buying TP bundles 'ad-hoc'

Will proper micro-transactions be considered in the future to buy low value/single items direct from Turbine that would fall into the 'non-game content' bracket or will the store continue to use points as currency with all items taxable as 'content' ?

If smaller purchases are made practical you could find your free to play players making one-off purchases that currently they do not want to commit to that requires a bundle initially transacted. Now that Visa purchased Playspan (https://developer.playspan.com/developer/pdf/PlaySpan-Visa-Close-Press-Release.pdf;jsessionid=227858BF95C48475657914B66EF E193B)has their payclick (http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fwww.payclick.com.au%2F&ei=SbSZTfLpBYfpOefWiJgH&usg=AFQjCNH2yaLmYdeHGH8NM_HbdU1O6rUVQA)service been evaluated to see if it fits as an additional model?

These micro-transactions could then possibly be argued to not fall under VAT if applied to smaller items that are not considered part of the game 'content'.

[Hendrik]

Sorry Blackbird but you're posting huge chunks of text that have little relevance to this subject and I may be missing relevant points skimming through your posts.

One of your examples was how the US taxes for it's own benefit, another how a Swiss owned bank with a physical bricks and mortar presence within the US was prosecuted/threatened with prosecution for being an accessory to US tax evasion. They were physically present within the US and have to follow US law.

For what it matters I'm not saying that Turbine aren't obliged to take VAT. I'm saying that they haven't bothered until recently, when it looks like a European marketing push is about to happen.

Can you think of another reason for the translation release a couple of weeks ago?

What would you say the reason for not collecting VAT for a year was? They were either ignorant, or advised by professionals that there was no reason to go through the expense of complying with the foreign law.


OR, since CODEMASTERS is in the UK, they did not need to charge VAT because they are a UK based company?

Naw, way to easy of an explanation.

:rolleyes:

[lekkus]

OR, since CODEMASTERS is in the UK, they did not need to charge VAT because they are a UK based company?

Naw, way to easy of an explanation.

:rolleyes:
Lol. Even when codemaster was in the UK we had to pay VAT. Any other bright ideas? ;)

[Blackbird]

Also, Blackbird never said it is irrelevant why they did not collect (or charge) VAT before, he said:

She ;) But thanks! :p


I would like to point again to something other mentioned in one of the closed topics about this...

The site GOG.com, a place where you can buy classic games, haves this:

"Fair Price Package: All customers paying in euros receive a store credit in USD for the price difference between European & worldwide price."

(http://www.gog.com/en/page/tw2v2)

This would appease the European consumers and, even if it is not Turbine fault, reduce the penalty in the TP costs for European costumers.
I also don't believe this would be much penalizing for Turbine and it could even increase the European selling of TPs.

So, because one company agrees to eat the tax, you think they all should? That Turbine should be less profitable -- have less money to spend improving the game -- because you don't want to pay your taxes? You should move to America, we apparently love this way of thinking here! (unfortunate sarcasm). Do you go around to all the stores in your area demanding they pay the VAT for you? After all, you would pay less for your items that way and that would appease you, wouldn't it?

The additional you are being charged is not a penalty. It is taxes your country imposes. If you do not like the taxes your country imposes or the simplified VAT collection system for non-EU companies the EU Commission has set up then contact your local politicians. As for companies that "eat the VAT" -- do you even know if all countries allow companies to "eat the VAT"? I know here in the US, some states forbid businesses from paying the sales tax for the customer.

I don't think I've ever met anyone who liked paying taxes (me, I'm a little indifferent). Instead of looking at Turbine's new VAT collection as a price increase which is apparently an international human rights violation the way some people are reacting, why not look at it as if you got a spectacular deal up until this point? Why is everyone always so "glass half full"?

[MrLarone]

OR, since CODEMASTERS is in the UK, they did not need to charge VAT because they are a UK based company?

Naw, way to easy of an explanation.

:rolleyes:

if that's meant to mean that only foreign companies need pay VAT that's incorrect.

if VAT is applicable to DDO and Turbines operations then it was always applicable, who's ever responsibility it was over the years (codemasters/atari/turbine/warner brothers).

that said i don't fully understand the change happening now.


... i.e. Distance selling...

after my thread on this topic was locked i briefly spoke to the moderators.

the answer was a diplomatic mixture of i don't know/i'm not authorised to look at this. i was advised to write to turbine account support... having done so previously i'm not holding my breath.

i'm merely pleased to see this issue being raised within the conscience of the community.

[Hendrik]

Lol. Even when codemaster was in the UK we had to pay VAT. Any other bright ideas? ;)

Not enough coffee before I posted.

:o

So, have to pay VAT with CM, have to pay VAT with Turbine.

Where were the complaints about VAT with CM then?

So, sounds like VAT stopped during the transition from Atari to WB and started once we went Global.

[MrLarone]

Do you go around to all the stores in your area demanding they pay the VAT for you?

not at all.

how ever i will ask them to clearly state the amount of the charge that is VAT (as retailers are required to do).

i'll ask them to charge the rate of VAT applicable.

for many years the UK had a VAT rate of 17.5%. after the recent economic turmoil this was reduced to 15% (to encourage spending) and is currently set at 20% (as part of a drive to reduce the UK's deficit). these changes have be more or less instantly reflected by retailers, at their own expense (updating price labels overnight for example).

that said i think it's understandable for those of us this affects to ask questions of Turbine. this has absolutely not been dealt with in the expected manner. we've had numerous locked threads. iirc there's been 4 comments from the mods, with the only answer to a question being to supply turbines registration number (which i thank turbine for).

the whole thing is completely at odds with how we're used to being charged VAT.

when people starting dealing cards in a way you don't know, you better be of a mind to ask questions of it's legitimacy, else on your head may it fall.

[Razcar]

Do I really need to point out it was not Turbine who came up with that system but the European Commission and any complains about how it is unfair to businesses and/or end-customers would probably be better addressed with them?
Just as a side note; if you want to protest against this you shouldn't protest to the European Commission. You should protest to the politicians in the European Parliament that represent your country and your political persuasion. They are the ones who voted through the current legislation.

[Argila]

She ;) But thanks! :p

So, because one company agrees to eat the tax, you think they all should? That Turbine should be less profitable -- have less money to spend improving the game -- because you don't want to pay your taxes? You should move to America, we apparently love this way of thinking here! (unfortunate sarcasm). Do you go around to all the stores in your area demanding they pay the VAT for you? After all, you would pay less for your items that way and that would appease you, wouldn't it?

The additional you are being charged is not a penalty. It is taxes your country imposes. If you do not like the taxes your country imposes or the simplified VAT collection system for non-EU companies the EU Commission has set up then contact your local politicians. As for companies that "eat the VAT" -- do you even know if all countries allow companies to "eat the VAT"? I know here in the US, some states forbid businesses from paying the sales tax for the customer.

I don't think I've ever met anyone who liked paying taxes (me, I'm a little indifferent). Instead of looking at Turbine's new VAT collection as a price increase which is apparently an international human rights violation the way some people are reacting, why not look at it as if you got a spectacular deal up until this point? Why is everyone always so "glass half full"?

So... you didn't like the suggestion? Jellos that by doing this European customers would get more TP points then you? ;)

Anyway, I cant even pay the subscription anymore since the billing system is busted and is not accepting my card anymore (the same that has been accepting for months). So... Premium world here i am.
(send a email to support yesterday, but no reply yet, btw)

[Smitey]

Not enough coffee before I posted.

:o

So, have to pay VAT with CM, have to pay VAT with Turbine.

Where were the complaints about VAT with CM then?

So, sounds like VAT stopped during the transition from Atari to WB and started once we went Global.

Codemasters only had subscriptions - the store (and therefore freemium model) was never made available to DDO:Europe.

[Blackbird]

So... you didn't like the suggestion? Jellos that by doing this European customers would get more TP points then you? ;)

Anyway, I cant even pay the subscription anymore since the billing system is busted and is not accepting my card anymore (the same that has been accepting for months). So... Premium world here i am.
(send a email to support yesterday, but no reply yet, btw)

Jellos? No, I'm not a gelatin dessert. Jealous? No. I don't care one way or the other for the suggestion. Why would I care if people get more TP than me? It's not something that affects my life in any way. But what you were implying was that EU players were being "penalized" and that Turbine was somehow at fault for you having to pay your taxes.

[Argila]

Jellos? No, I'm not a gelatin dessert. Jealous? No. I don't care one way or the other for the suggestion. Why would I care if people get more TP than me? It's not something that affects my life in any way. But what you were implying was that EU players were being "penalized" and that Turbine was somehow at fault for you having to pay your taxes.

Actually, i didn't imply that EU players were being "penalized" and that Turbine was somehow at fault for we having to pay our taxes.

If you read my post more carefully:


I would like to point again to something other mentioned in one of the closed topics about this...

The site GOG.com, a place where you can buy classic games, haves this:

"Fair Price Package: All customers paying in euros receive a store credit in USD for the price difference between European & worldwide price."

(http://www.gog.com/en/page/tw2v2)

This would appease the European consumers and, even if it is not Turbine fault, reduce the penalty in the TP costs for European costumers.
I also don't believe this would be much penalizing for Turbine and it could even increase the European selling of TPs.

Also, if you ask me, I don't mind paying the tax, never said i did.
What I do mind is to see the amounts payed for tax not being delivered to the government. The Turbine VAT number is now posted, so I am satisfied in that regard. What is missing now is the VAT receipt number (if not already there) and the subscription billing system fixed.

It still is my strong believe that the store credits would appease the European consumers (me included) and, even if it is not Turbine fault, reduce the penalty in the TP costs for European costumers. I also don't believe this would be much penalizing for Turbine and it could even increase the European selling of TPs.

[Beethoven]

But unless laws have changed, their operation as a supplier of online content to an international market has not changed with just language localization. So unless laws have changed, I can't see the legal need for Turbine to do so from this arbitrary start point.


There is no such thing as an international (tax-free) market (anymore). Governments long realized how much money flows through the internet and with every year new laws are passed for them to tap into that resource. You ask me and it's only a question of time until the US too will charge taxes on digital services and goods. Language localization is only part of a puzzle clearly indicating Turbine means to sell to European consumers. Ultimately the question is just that: do they sell their services to residents of European member states?

What's confusing about it?

* Companies selling digital services to consumers in European member states are required to collect VAT whether or not they have a physical representation in these countries.
* Companies with no physical representation in a EU member state selling digital services to consumers in European member states will be assigned a VAT number that starts with EU. VAT numbers starting with EU cannot be verified with usual VAT validation services; information about these companies is exclusively stored in databases available only to Mutual Assistance Offices (sub departments of local VAT collection Agencies) and to verify these numbers consumers need to contact their countries Mutual Assistance Office.
* by having no physical representation in an European member state a country is hardly save from consequences for avoiding EU tax law. There is a long list of examples European countries and the US engaging in mutual cooperation to enforce their respective laws. Also, we don't know if Turbine has any assets in Europe that could be frozen. Warner Bros most certainly has assets there though.

Definition of digital goods and services: anything that can be delivered through an information infrastructure such as the internet. Turbine's product (DDO and everything having to do with the game, including things bought over their in-game store) can be considered a digital service by definition.

So, in other words, Turbine is selling a digital service to consumers in European member states and thus subject to the VAT law. Turbine does not have a physical representation in an EU member state and thus is assigned a number starting with EU (which only can be verified by going through a Mutual Assistance Office).

You don't believe me, there are various links in this thread to the European Commissioners website where all this information can be verified.


OR, since CODEMASTERS is in the UK, they did not need to charge VAT because they are a UK based company?


Actually, Codemaster charged ~17% VAT until Jan. 4, 2011 on both LotR subscription plans as well as game-related purchases. Now, after Jan 4, they charge 20% VAT (based on the raise of VAT in GB). To be fair, Codemasters too got complains about collecting roughly 4% more taxes. By and large though they are in a better situation since they always charged VAT tax and by being a British company it makes the whole situation far less confusing.

I will fully admit it is somewhat odd why Turbine started charging VAT only now. Legally they were obliged to collect the tax for 2010 already. I just find it has little bearing on the question if they have to collect/pay tax for 2011. They may have put it off because they did not want to deal with it. They might have gotten some sort of grace period to comply. They may have not fully understood they need collect VAT tax until they got a not-so-friendly letter from a tax office about outstanding taxes. It could well be for a reason they do not like to publicly admit and they rather eat the cost than having to deal with the PR fallout.

Now, considering how the whole thing was handled by Turbine (from not charging VAT initially, forgetting mention the European store prices went up due to now charging VAT, to none of their automated systems having been modified/updated to accommodate VAT (and still aren't), and finally apparently not even realizing the requirement of making their VAT number publicly accessible), my current working theory is they were simply in over their head. Frankly, at the end of the day they are but a bunch of software geeks. Hardly can expect a military precision from them in all walks of life.

In fact, I am more amused by it than anything and all the European in me wants to say is: "a jolly hello and welcome to Europe." There is a reason that, where I am originally from, we get to legally drink with sixteen already, y'know?

[Hokiewa]

Actually, i didn't imply that EU players were being "penalized" and that Turbine was somehow at fault for we having to pay our taxes.

If you read my post more carefully:



Also, if you ask me, I don't mind paying the tax, never said i did.
What I do mind is to see the amounts payed for tax not being delivered to the government. The Turbine VAT number is now posted, so I am satisfied in that regard. What is missing now is the VAT receipt number (if not already there) and the subscription billing system fixed.

It still is my strong believe that the store credits would appease the European consumers (me included) and, even if it is not Turbine fault, reduce the penalty in the TP costs for European costumers. I also don't believe this would be much penalizing for Turbine and it could even increase the European selling of TPs.

Penalizing? Losing 20-25% of what they charge for TPs? That's a bad business model.

[Smitey]

Instead of looking at Turbine's new VAT collection as a price increase which is apparently an international human rights violation the way some people are reacting, why not look at it as if you got a spectacular deal up until this point? Why is everyone always so "glass half full"?

Economics.

Consumers will always look at the providers cost without deducting tax and determining if the net cost is a good deal. They will also compare what deal others get or competitors offer.

20% increase is a sizable amount. The fact it goes to the taxman, and possibly in a foreign country at their rates does little to appease some.

The implementation was very poor and responses have been minimal - so concerns are still valid and outstanding.

Turbine have asked for feedback and intend making improvements to the service so if someone is affected why shouldn't people respond with suggestions on ways to retain customers (and obviously payments from them)? As you stated yourself it does not affect you so I don't see your objection. For you nothing has changed unexpectedly. Turbine are going to expand into Europe so tax matters need to be settled beforehand and pricing transparent.

The ramifications are not limited to 'oh well there goes a slice of my unavoidable payment to the tax man' like other commitments - for some this would mean a reduction to planned 'entertainment expenditure' if thresholds are tight. The freemium model was introduced to entice the non-subscriber to the game so pricing it right is key; especially in different markets.

As the cost has risen some players may well be deterred from buying at all if the customer service is poor - which for EU players it can be in comparable terms of payment methods;support opening times;telephone costs;spoken languages etc.

[MrLarone]

Penalizing? Losing 20-25% of what they charge for TPs? That's a bad business model.

i don't think anyone is seriously suggesting turbine fully absorb VAT.

you have to remember that there's been very little information and the opening comment from Turbine was that this was all done for the benefit of European players.

GOG is cited as a company doing something for the benefit of their European players.

IMO this is a fair comparison that turbine has left them self open for.

this whole argument also has to be taken in the context of Europe, in general, paying a higher price on most entertainment in comparison to the US when measured in pure monetary terms. we're not unaccustomed to american companies nickel and dimming us.

[Smitey]

Penalizing? Losing 20-25% of what they charge for TPs? That's a bad business model.

If the product had a set cost to produce, yes.

They would not be 'losing' 20% on a virtual currency which they control and can segregate according to market.

Price point is key so if this tips over certain thresholds they potentially risk losing customers.

[lekkus]

Why not? You ask any company why they collect taxes and their answer is likely ultimately going to boil down to "because it's the law." Why else would they? Because they are trying to be funny?

Posters alleged there is no legal obligation for Turbine to collect VAT and since they have no physical office in Europe, European authorities could not enforce their tax law upon them. Several other posters have tried to dispel this misconception, posted links to actual legal text stating the opposite and gave examples of multi-national cooperation in regards to tax evasion.

Why not you ask? I don't really understand the question. You are asking me why Blackbird shouldn't venture in Marketing? I am not aware of other talents but it is quite clear, to me anyway, her forte is in Law, more power to her to be honest.

Also, Blackbird never said it is irrelevant why they did not collect (or charge) VAT before, he said.
Yes she did...



You are up in arms because they didn't collect it for 18 months and now are. There is no rationale basis for it. If you accept that they are required to collect it, what difference does it make that they did not before hand? Maybe there is a threshold of activity before they were required to or maybe they weren't complying with Eu law and got in trouble. The point is, we don't know. Myself and others have pointed to specific official websites that detail how a non-EU business is supposed to collect VAT. The fact that they didn't before is completely irrelevant. .

And that is something that isn't entirely true. Maybe the UK is interested in collecting 18 months of VAT from that period as well? Not up to me to decide this, tough times. I don't care either way. I am sure Warner has an office in London though, so Turbine is more or less represented in Europe for a longer time than last week when they promoted the janitor/ whomever. I wonder if they gave him a phone so I can call this person for support.

I am not arguing with Blackbird about the law or tax, she might be right. European pay a lot of tax, why should it all the sudden be different? And I am not saying Turbine is doing anything illegal either. I am trying to understand though why I all the sudden have to pay tax after playing this game for 18 months already. Why was there no prior information? And now that I pay VAT there are also ramifications for Turbine. Can I now ask for a refund within 7 days? I should be able to do that now I pay VAT.

Isn't logical to ask as a customer clarification from Turbine, instead of reading here, I should turn to my representatives and question their sanity involved tax laws? Really? Next thing is probably asking my mother why she put me on earth, I guess.
A free to play game no less and even if I pay money to buy thousands of turbinepoints, I can never trade them in for real currency or if Turbine tomorrow decides, "hee Lekkus you're out", I have no foot to stand on. The game is never mine, including the turbinepoints, so what am I actually buying? People have been banned for nothing (mabhar-event) even though that was corrected eventually.

Not so long ago there was a sweeper contest where you could win 100.000 turbine points. It turned out it was only for the US. The rest of the world-playersbase had to find out for them self why they were not eligible. No explanation from Turbine. Just giving the players coming from the euro-servers 5000 turbinepoints (including me) was no problem. Huh? The US players had to find out for them self if they would be taxed for $100 if they actually won. Mass bannings and the player base had to find out why? It goes on and on frankly.

If you don't understand how a customer driven company works ...well, I can tell you, this is not the way. The law is quite irrelevant in this. Most people agree with this.

[ITZYBITZY]

In turn reading this i have come to believe :

1) wb/turbine should of released the upcoming changes to uk vat hikes in january this in turn would show the price increase..
2) Businesses which market digital content face a number of specific issues:
There is no physical flow of products linked to transactions
As a marketer of tangible products, the traditional trading or production company
can rest assured on the strength of this physical flow of goods that all outgoing
items will actually proceed to invoicing and generate revenues. In the marketing
of digital content, however, there is no relationship between revenues and
an outgoing flow of products. Since digital content never ‘runs out’, it can be
distributed again and again without any further expense, aside from the relatively
low cost of distribution. Traditional methods for assuring the completeness of
revenues are thus not applicable.
The order-to-cash process is exactly the opposite of a physical flow of goods
The sale of online digital content produces payments in a reversed direction and
calls for co-operation amongst market players. Although the payment appears
to occur at the end of the value chain, it actually takes place immediately after
ordering and before delivery. "hence the need to pay VAT here "
Digital content is often marketed in a business network; that spells
dependence
Digital content is only rarely sold to consumers directly by its owner. In most
cases, content first makes it way to other businesses which upgrade and market
it, provide a distribution platform or attend to the financial side of things. Since
these transactions frequently take place out of the content owner’s sight, the
latter risks losing control over them. To be assured that it is not missing out on
any revenues, the content owner must be able to trust in the goodwill of its
business partner, the reliability of its technical and accountancy systems and the
proper choice of business models and contractual arrangements. "AGAIN here is the stipulation between TURBINE/the points seller and wb the content owners" hence the ability to claim 2 refunds in vat :S
A good example is the prevailing model for selling music online in which
recording companies make their music catalogue available to third parties. The
music files are often 'physically' placed on another platform from which end users
can download them for a fee. Since the recording companies have no way of
seeing how often and in which form their content is delivered to consumers, they
are therefore made dependent on the goodwill of their business partners and the
reliability of their systems. Their contracts often allow them to audit systems and
check statements of transactions, but that rarely happens in practice. Control is
limited to comparing the accuracy of the agreed prices: no completeness check is
made.


In turn as stated in the opening disclaimer turbine are constantly monitoring you whilst you play the game this in turn shows how they know where you are when you are and how often you use the product there is no avoiding this in any way
Born to be taxed until you are taxed to death and dont worry folks you think thats harsh your even taxed when yr gone go figure ill now shut up go away and never pay for anymore points suits me anyways especially when there are so many OTHER major issues at hand like broken stats items not working super nurfing and a lack of Pre's for certain characters maybe just maybe this will get rectified to some degree in u9 but hey dont hold yr breath but if you like i can sell you a unlimited breath underwater ring for those willing to try hahahaha enjoy :)

[Cade_Wells]

so now we have the VAT number does the receipts have the VAT number and a breakdown of VAT amount on them ?

[Marewood]

Wow - I really wonder for how long you folks can keep floggin the dead horse - Lorien this is particulary for you as you seem to know virtually everthing about international taxation and you seem to be very keen on spending most of your time giving Turbine the benefit of doubt and on convincing most other posters of this position:

There have been tons of threads and all we get as a response from Turbine is an obscure VAT number.

1) This information we're talking about (as to why theres a price increase for some players, what it is based on, how it is calculated and so on) should visible for anyone using the store BEFORE the price increase goes life.

2) Did any of you guys who keep arguing that all's 100% correct bother to take the time to check the DDO store receipts or ask someone from Europe? No? Thought so - Here it is: Copy pasted from the store - if you don't beleive it - feel free to try it yourself or ask someone from Europe you trust (checkout price listed for 600TP):

Sub Total EUR6.99
Sales Tax EUR0.00
TOTAL EUR6.99

REPEAT - Total price increased, no sales tax listed. This boils down to two possible causes a) no sales tax deducted b) VAT deducted and Turbine issuing wrong bills. Thats the current state after almost one week of -obviously fruitless - discussion.

[Kranggle]

Let's face it - it's a con! This is just a discriminatory price hike for EU players. The only "evidence" that turbine have submitted is an untraceable EU vat number.

This does not appear on receipts and the "tax" amount does not appear as a separate item.

It's a price hike - nothing more.

I won't be buying any more turbine points across either of my accounts. Roll on Guild Wars 2!

[Buggss]

So is this it? Nothing more back?

The prices jump for something that we never actually receive or ever own, never cross the EU borders (the laws are stupid on that regard) and Turbine just throw the whole % on us and refuse to endure any of the extra themselves?

When update 9 appears and there's lots of improvements only available through the store/TP's it'll basically mean to have any hope of keeping up with the Jones' you have no choice but to buy TP's Turbine'll see a huge drop in sales as people find something else to do.

In-game changes are one thing but when money is messed around with and the extra is all just thrown on our bill it's beyond a joke.

[ShotByBothSides]

Just catching up with this thread after a holiday break and have still yet to read any response from Turbine that will encourage me to spend any more on TPs.

[mythar]

I, too, am waiting for a reply of Turbine about this.
I still have TP left, but they will eventually be spent, and I am not buying TP for the actual european prices.

[Dexol]

We had a response, they said here you are now shut up and give us your money :(

Wonder if the loss in sales from europeans not buying tp is more than the hit they were taking from eating the vat

[Argila]

Seen the DDO Spring Point Special! 6,900 Points and all that.

Funny, when i click the add points, the 6900 doesnt appear...
(not that i wanted to buy any points anyway)

[Gkar]

So is this it? Nothing more back?

The prices jump for something that we never actually receive or ever own, never cross the EU borders (the laws are stupid on that regard) and Turbine just throw the whole % on us and refuse to endure any of the extra themselves?

When update 9 appears and there's lots of improvements only available through the store/TP's it'll basically mean to have any hope of keeping up with the Jones' you have no choice but to buy TP's Turbine'll see a huge drop in sales as people find something else to do.

In-game changes are one thing but when money is messed around with and the extra is all just thrown on our bill it's beyond a joke.

Why should Turbine take a hit because of the tax laws in your country that say to charge you tax? Take it up with your government, not Turbine.

[Farayon]

I wish Turbine stated the point bundles available to their European playerbase which are as follows:

600 pt = € 6.99

1600 pt = € 17.49

2600 pt = € 25.99

That's it. The big bundle is not being sold in Europe.


Since I bought my last 6900 TP at €38 the current offer doesn't really make me spend any more money on DDO.

[Gizeh]

just checked the ddo store, and the 6900 pt bundle is available for €46.79.

But more importantly, I hope that VAT percentage and amount will be shown soon in the shop (maybe with update 9?), as the lack of this information is what annoys me and most people I've talked to about this subject the most. I am not sure if this is required (I'm no legal expert at all), but on every receipt I get when I buy something not only the total price is shown, but also the base price, VAT percentage and VAT amount, and I guess many europeans who currently refuse to buy more tps will change their minds once they get this information.

Please, Turbine, don't risk losing us european players by denying us important information.

[Flavilandile]

I hope that VAT percentage and amount will be shown soon in the shop (maybe with update 9?), as the lack of this information is what annoys me and most people I've talked to about this subject the most. I am not sure if this is required (I'm no legal expert at all).

It is required by various EU laws.
The VAT % and how much in hard € it amounts to has to be present on the receipt.

I'm not a legal expert either, but that's something we learn here in Froggy Land...
As there's several VAT rates for different things...
For example : a Triple Play DSL subscription ( DSL line + VoIP Phone + TV ) is subject to several VAT rates :
5.5% for the DSL Subscription
19.6% for the VoIP phone and the TV
and the monthly bill has to show all that...

[MiKe_de]

Call me crazy, but if I were to ask 100 European players if they'd rather not have the client localized but instead save the VAT, what would you imagine they'd say?

(Personally, I'm curious, but I do know what *I*'d say :) )


Yes, I officially declare: Give me please the US client back. I do not care for any european client, I do not NEED this client, I always play original games in US-language.

I am not interested in this client, so WHY the hell do you force it upon me?

[MiKe_de]

just checked the ddo store, and the 6900 pt bundle is available for €46.79.

But more importantly, I hope that VAT percentage and amount will be shown soon in the shop (maybe with update 9?), as the lack of this information is what annoys me and most people I've talked to about this subject the most. I am not sure if this is required (I'm no legal expert at all), but on every receipt I get when I buy something not only the total price is shown, but also the base price, VAT percentage and VAT amount, and I guess many europeans who currently refuse to buy more tps will change their minds once they get this information.

Please, Turbine, don't risk losing us european players by denying us important information.

Nah, we can do worse things than that. We can simply take the term free2play very serious. ;) And play, without buying a single turbine point in the future.

Most of us have paid before, but we can stop that immediatly. I have so many quests, I never seen before. I can simply wait for a better sollution.

Another simple truth: Noone forces turbine to let the customers pay their taxes. It's their own decision, and its the wrong decision with a global internet game.

And by the way:

Three days ago the price was 43 Euro for 5000 points. So I feel betrayed. I can't say it otherwise, that you are betraying the european gamers.

Even IF you list those taxes, it doesn't matter any more, because in the past I could buy points without any problems. in the US-shop. Maybe you should let decide the players how they want to pay for your points?

Because ... at the point, then you are able to buy point cards via internet ... guess which cards the players will order. And what hell will break loose, if you do not accept your OWN internal currency named turbine points. ;)

[MiKe_de]

Why should Turbine take a hit because of the tax laws in your country that say to charge you tax? Take it up with your government, not Turbine.

Because maybe they want to stay in business in Europe?

And of course I take it up with turbine. They changed the rules and the client. :(

And believe me, they will take a hit. Because people can do math. They don't care for any taxes. We are in a process of globalisation.

They take a hit in their reputation. Their whole 'More-points-for-holidays' will only make european players angrier. It worked very good in my case.

With today exchange rate:

50 USD = 34,36 EURO = 6900 Turbine Points.

46,70 EURO = 67,93 USD = 6900 Turbine Points. What is wrong with this formulas? ;)

34,36 Euro are 73,57 % from 46,70 Euro.

This means if 34,36 = 100% then 46,70 = 135,91%

This means this is a 36% taxrate ? :o Come on. That's not tax, it's greed. Cut the ****.

-----

I can order my games whereever I want. If I buy a game in UK, it is 30% cheaper than in germany. I even buy US Imports. and they are cheaper. I play original untranslated games, so I know the prices. Do not try to fool us.

[Winter_storm]

I am sorry an IP is something purely virtual and not necessarily bound to a physical location. Someone from Europe could theoretically buy an IP address from an US seller. That is by the way exactly what those video proxies do to be able to view US broadcast shows via Internet without being physically in the US. The broadcast service is checking your IP, see that this is registered at an US company and thats it. It is nearly impossible to track down from where exactly a network package came from.

A network package is send from location X into the network without a fixed way-point. This package could either go once around the world via Russia, china over the pacific to the US or from Europe through the Atlantic over to the US. There is no way you can predict how it goes. Thats a benefit from the structure of the Internet as it works even if you would cut the cable in the Atlantic!

So based on the IP you can't control anything, you can just guess. Therefore it is much safer to ask the customer for the billing address and use this information.

This is kinda of late response. But wasn't focusing on proxies. Most would not have reason for this and even then, those proxies are also have blocks of rented IP's.

ISP providers are assigned blocks of IP's (rented). If this didn't happen there would be a problem since two or more different computers (or nodes) could have the same IP addresses. So at home you might have a varied IP but within the bounds the ISP provider sets. So you can trace the physical to the ISP provider (like the shortcut shows). From here would need a permission or warrant to get your physical address from here.

Was just trying to make it simple, not all Cisco complicated with proxies and all. :D

[Winter_storm]

Speaking of IP locations. Just ran into this...

http://arstechnica.com/tech-policy/news/2011/04/getting-warmer-an-ip-address-can-map-you-within-half-a-mile.ars