VAT Discussion

[Cordovan]

We appreciate that the collection of VAT is something many of you have strong opinions on. Creating multiple threads to discuss a singular topic, however, is somewhat counterproductive. It makes it difficult for us to follow the discussion, and it makes it hard for the community to keep up as well. We would appreciate it if you would restrict all your comments to this thread going forward.

Please remember to follow our Community Guidelines when posting in this thread.

Thank you and we appreciate your cooperation.

[Asketes]

Thanks for making another discussion thread Cela/Cordo.

I'm sure the community appreciates it having a place to congregate and hopefully have a few QQ's answered.


Cheers again GM team.

[fearlossPhiction]

thank you for doing this Cord, its needed, although i'm not sure the main 2 original threads where shut as they contain the gist of the argument.

[slimkj]

I would think my original post will remain available but just in case;

I understand the need for you to charge VAT. I don't think that the increased price reflects good value any more. It's an opinion - I don't expect you to necessarily do anything about that, but there it is. I can't see me paying $61.99 for the top bundle.

It'll be interesting to see if you react with price cuts to the bundles for EU customers to keep sales up. Lots of goods sellers in the UK for example advertise "We pay the VAT" deals at the moment as they know cost of living has gone up, wages have stagnated, etc. and that they just can't sell at the old prices any more.

[Seikojin]

For informational purposes only, please disregard any negative comments:
http://forums.ddo.com/showthread.php?t=309543

http://forums.ddo.com/showthread.php?t=309693

[ShotByBothSides]

I accept you have apologised for not announcing this in advance, I just hope that you learn that that was not the best way to engender good community relations.

I can’t speak for all EU players, but I would really like some clarity on how the prices have been calculated; for at the moment the pricing structure seems high and may well use a composite VAT rate for all EU countries, most of whom have varying VAT rates. I suspect the explanation maybe to do with being able to “register” with one EU country or something like that.

But some open clarity will stop the speculation.

Also a VAT number on the receipts is normal when VAT is being charged; or at least the option to request a VAT receipt; a VAT receipt is needed for those who may be able to “claim back” the VAT.

I think you will find that a logical, mathematically/financially sound explanation of the pricing structure will go a long way to helping to restore good will. For now I will make my stock of TPs last until I understand how this all works.

[Esmyra]

To those who believe that the bundles before included taxes (in the United States, at least): They didn't.

In the USA, each city sets it's own taxes. Yes, there is a state tax, but I don't know if that applies, regardless, it doesn't change some of the other bits of what I say. The main thing is, when purchasing from an online seller, they aren't required to collect taxes on the purchase, because they have no idea what city you're buying from. However, that doesn't mean that we aren't supposed to pay taxes on the purchase. In fact, when we do taxes at the end of the year we're supposed to put in any purchases we made that didn't have taxes paid on them, so that we can pay those taxes at that point. Needless to say, most people don't do this.

So yes, if I buy $200 worth of points throughout the year (I won't, but if), I'm supposed to pay the taxes on that at the end of the year. Different methods.

Edit: I hate it when I revise a statement and miss a different revision...taken care of. Now it says what I meant to say.

[ShotByBothSides]

So yes, if I buy $200 worth of points throughout the year (I won't, but if), I'm supposed to pay the taxes on that at the end of the year. Different methods.

At least you get the choice to cheat the tax man or not

[Esmyra]

At least you get the choice to cheat the tax man or not

Yeah, but the whyfores and such give me a headache. Besides, most people forget that they even bought something like that. Hell, I didn't know about this until my girlfriend pointed it out two weeks ago! I'd guess that 90+% of the USA population doesn't have a clue that they're supposed to pay taxes on online purchases. Go figure.

[NinjaNeed]

Having followed most of the discussions so far on this subject it sounds like we all want to know a few things....

1. why are we paying more than Americans? If it is purely due to VAT then why are Americans NOT paying VAT? It makes no sense for us to pay an extra 20% when VAT is 20% unless the Americans do not pay any VAT in the first place.

2. can we please have your UK based VAT number. This is something you are legally obliged to give to us (the customer). Most people want it just to double check that it is VAT we are paying.

3. are you going to follow the rest of the EU laws? We in the EU are entitled to a 7 day no questions asked money back guarantee on any UNUSED products. So, if we purchase 5000 points today but do NOT use them, we should be (and am by EU law!) entitled to a full refund.



Basically, Q1 is about US tax rates. What US state is Turbine registered in so we can check the local tax laws ourselves.

Q2. confirm that it is VAT being paid to the UK government

Q3. you can NOT pick and choose what laws to follow. You follow one you follow them all.

I look forward to an official reply (although I doubt I will get one)

[Gol]

If it is purely due to VAT then why are Americans NOT paying VAT? It makes no sense for us to pay an extra 20% when VAT is 20% unless the Americans do not pay any VAT in the first place.

USA has no VAT. Ergo, we pay the full rate of 0%.

[cdbd3rd]

USA has no VAT. Ergo, we pay the full rate of 0%.

But be patient, we have politicians/lobbyists pushing for taxes on internet purchases.

To clarify a bit - USA has a Sales Tax (our equivalent of VAT), but it is added on to our purchases after everything is rung at the register. VAT, in UK anyway, was always added into the displayed price of an item.

[Junts]

But be patient, we have politicians/lobbyists pushing for taxes on internet purchases.

To clarify a bit - USA has a Sales Tax (our equivalent of VAT), but it is added on to our purchases after everything is rung at the register. VAT, in UK anyway, was always added into the displayed price of an item.

However, all US sales taxes are state or city taxes, and there is no federal sales tax, which is a big part of why sellers are not required to collect it in online sales - its nearly impossible for them to determine what jurisdiction you're making the purchase from, since it's not only state but municipality that matters.

In the US, the federal government is funded primarily by income and capital gains and corporate taxation, states with a mix of sales and income taxation, and municipalities and local jurisdictions (like school districts) with real property and sales taxation.

edit: also, state-mandated sales taxes in the US never exceed 10%, and I believe 6% is the most common number. Municipalities often implement higher, but item-specific sales taxes. For example, Washington DC has a 15% sales tax on restaraunt purchases. Generally, these taxes are designed to strip money from tourists and the things they buy (hotels, restaurants) and avoid punishing actual residents, since the residents elect the politicians who implement them.

[Postumus]

To clarify a bit - USA has a Sales Tax (our equivalent of VAT), but it is added on to our purchases after everything is rung at the register. VAT, in UK anyway, was always added into the displayed price of an item.

The 'USA' does NOT have a sales tax.

Many individual states and municipalities have sales taxes, and many do not.

Oregon, for example, has no sales tax whatsoever.

[Cold_Stele]

USA has no VAT. Ergo, we pay the full rate of 0%.

Wrong.

You have differing sales tax depending where you live.

Just like in Europe.

First of all, it is normal that Turbine raises the prices a little for Europe. This is due to the "exchange risk" (the risk of losing money as a consequence of currency fluctuations) that they run when selling goods at a fixed price (it wouldn't be the case if all TP were sold in dollars, and their price in euros would fluctuate as well)

You're aware that up until a couple of days ago they were sold in $, so there was no 'exchange risk'?

[Daunth]

You're aware that up until a couple of days ago they were sold in $, so there was no 'exchange risk'?

well, I think I'm quite aware of that, since i've written

When establishing a fixed price in Euros, Turbine is taking the exchange risk instead of the final customer

read: Turbine is establishing fixed prices that didn't exist before.

[Hokiewa]

Wrong.

You have differing sales tax depending where you live.

Just like in Europe.



You're aware that up until a couple of days ago they were sold in $, so there was no 'exchange risk'?

It's not wrong. There is no "federal tax" on goods and services to the consumer. Turbine, as an online entity, only has to collect state taxes in a state that they have a physical presence in and even that has restrictions. Regardless, we have nothing comparable to the VAT.

Your comparing apples to fish.

[Postumus]

Wrong.

You have differing sales tax depending where you live.

He's not necessarily wrong.

In some states, like where the poster you are replying probably lives, the sales tax IS 0%.

Not every state has sales tax.

[Gol]

What US state is Turbine registered in so we can check the local tax laws ourselves.

The Massachusetts sales tax is 6.25 percent of the sales price or rental charge of tangible personal property 1 or certain telecommunications services 2 sold or rented in the Commonwealth

link
Massachusetts State taxes do not apply as Turbine Points are neither tangible personal property nor a telecommunications service.