Lab ends VAT charges on Premium subscriptions

secondlifeIn a further more to sweeten Premium memberships, Linden Lab has announced that with immediate effect, those Premium members who have traditionally have had to pay VAT on their membership subscriptions will no longer have to do so.

The announcement is coupled with a reduction in the Monthly billing plan for Premium from US $9.95 a month to US $9.50, and reads in full:

Being Premium comes with many perks, including a weekly L$ stipend, more privacy with a Linden Home, exclusive gifts and experiences, and now, live chat with the Concierge Support team at Linden Lab.

If you missed your chance to take advantage of our recent 50% off monthly Premium Membership offer – there’s no reason to worry! Now, we’re reducing the standard cost of a monthly Premium subscription to just $9.50 a month. Enjoy all the benefits of Premium Membership for less!

We will also no longer charge VAT for Premium subscriptions. If you live in a region where VAT applies, this means an effective savings in some countries of more than 20% below what you would have previously paid!

VAT payment were introduced by the Lab in 2007. At the time, there was a widespread  – and mistaken – belief that the Lab were having to pay VAT as a result of holding offices and European (notably Brighton, UK). Further misconceptions were voiced (and sometimes still are) about the Lab charging VAT “unnecessarily” on the grounds that they no longer have offices within Europe.

However, as Forbes noted in 2014 when changes were being made to the basic requirements, the EU has, since 2003, always levied VAT against the delivery of electronic services (which Second Life is) from non-EU countries, including the USA. The difference was that prior to 2007, the Lab opted to absorb the VAT charges rather than passing them on to their European customers – at last until things reached a point where it was no longer economically viable for them to do so.

With immediate effect, those Premium members previously liable for VAT on their subscriptions will not longer have the charge passed on to them by the Lab. In addition, the monthly billing plan for Premium is reduced to US $9.50 a month
With immediate effect, those Premium members previously liable for VAT on their subscriptions will not longer have the charge passed on to them by the Lab. In addition, the monthly billing plan for Premium is reduced to US $9.50 a month

With the announcement, it would appear that  – in part – the Lab is once again willing to absorb VAT charges, and in doing so, offer a very credible benefit for EU members who may have been put off upgrading to Premium as a result of the VAT surcharge.

Speaking as an EU resident, I’m more than happy to see my annual subscription reduced from US $84.00 to the standard US $72.00. Together with the perks and bonuses recently introduced – such as the move of Premium live chat support to the Concierge team, this is precisely the kind of creative thinking by the Lab which could go some way to making Premium membership more popular among some sections of the existing user base.

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