European backers, Reward tiers, Duty and Tax hassle

[imhotep]

EDIT:

Pledging is comparable to buying shares in a new company. If the company so choose to send us a T-shirt as a thank you gift with no value, nobody can tax us.

I do not know what kinds of laws you have, but a company will have to keep books in accordance to law and pay taxes and all kinds of fees from anything they give to their owners. The owners are also required to pay all kinds of taxes from income they take from the company be it cash or t-shirts. If these are not paid, it is a fraud and hence illegal.

We are not investing in shares to get ownership; we are donating our money in hopes of some rewards. On one hand, it can be looked as charity, but getting rewards for it is a bit odd. On the other hand, we can look at it as buying in a disguise to avoid paying taxes: InExile from the donation income (perhaps) and backers from the rewards.

[infestor]

question: if the box is a gift package with no value attached to it, how much those tax frenzy officers charge? (in your own country)

[ElBartoME]

Let's say I'm going to pledge $115. $100 for the CE and $15 for shipping.
I'm quite sure that the german customs will check the package and send a bill along with the package.
That'll be $115 * 19% VAT = $21.85. So the total will be $136.85.
It's not THAT much, but it still somehow hurts.

But if they can't determine a value for that, then I'm in big trouble. I have to go to the customs office and they will set a price. And if you are unlucky, this price can be much higher than what the CE is actually worth. Usually they'll go into the internet and search for something similar.

Please, please inXile: You have to put a sticker on the outside of the package with determines the actual value of the inside! This makes everything ALOT easier. And the best would be the ACTUAL value and NOT what has been pledged.

[infestor]

my naïve solution for EU countries: inXile should ship the game for EU from an EU country. afaik, there are no customs between EU-to-EU shipments (i mean, c'mon, wasn't that the common goal of establishing EU in the first place? a free trade union?).

Let's say I'm going to pledge $115. $100 for the CE and $15 for shipping.
I'm quite sure that the german customs will check the package and send a bill along with the package.
That'll be $115 * 19% VAT = $21.85. So the total will be $136.85.
It's not THAT much, but it still somehow hurts.

then i'm looking a 25% from told. fuck.

[imhotep]

question: if the box is a gift package with no value attached to it, how much those tax frenzy officers charge? (in your own country)

If they agree that it is a gift, the tax and duty is based on e.g. the average price of the item or similar items currently on the market. We are speaking roughly 30% extra on top of that price. But that is not all. In this case that market price is most likely too high to begin with. The game does not have as high a budget as other boxed non-downloadable games. As backers, we should have the game for 'prime cost' not retail price. That is why we are hoping for InExile to mark the value. In any case, this is not so bad an option and it is justifiable to pay these taxes.

Most importantly, customs might judge that it cannot be a gift at all, because evidence within the packet itself or on internet states that we have transferred money to the sender in order to receive this shipment. Our legal system does not know of these kinds of donations to companies that then give us rewards. Charity is different: Here, one must get a permit to hold a fund-raising campaign and that cannot be obtained for any other than humanitarian purposes. And a specific requirement for fund-raising campaigns is that the backer does not receive any form of compensation. All this may lead to that they consider the donation as a purchase and the whole pledge amount becomes the price of item. Then we are talking about that 30% on top of the pledge which can be quite high in relation to the reward. This is a very problematic scenario.

Finally, if InExile marks the packet clearly as a purchased item for specific price, then InExile might have to deal with some nasty legal issues about donations and taxes related to those donations etc. This depends on local laws in the USA I am unfamiliar with, and cannot comment further than that.

[ElBartoME]

my naïve solution for EU countries: inXile should ship the game for EU from an EU country. afaik, there are no customs between EU-to-EU shipments (i mean, c'mon, wasn't that the common goal of establishing EU in the first place? a free trade union?).

then i'm looking a 25% from told. fuck.

But inXile still have to import the games into the EU. So now they are the one that have to pay the taxes. It doesn't really change that much. The VAT has to be paid. No matter what!

I once bought some DVDs from the USA. They got into customs and they sent me a bill along with the package. This can only be done, if there is a sticker on the outside of the package that determines the value! Otherwise I have to take my lazy ass to the customs office. And then they will determine a value..

I think the best solution is: inXile has to determine a (reasonable) value for their products (again: not the pledge value!) and put it on the package, so that the custom officers wont whine around...

[Tronite]

I think the best solution is: inXile has to determine a (reasonable) value for their products (again: not the pledge value!) and put it on the package, so that the custom officers wont whine around...

I don't know if it makes any difference at all, but would the price be reasonable enough if the value would be just the amount inXile paid to have the products made 'cause we would have already paid for them so there's no reason for them to ask for more on those. I don't know if this idea has any validity but this is just something I thought about.

[infestor]

I think the best solution is: inXile has to determine a (reasonable) value for their products (again: not the pledge value!) and put it on the package, so that the custom officers wont whine around...

sounds good in theory. mark it as (say) 15$ value and i will happily pay my 25% customs fee

[imhotep]

I don't know if it makes any difference at all, but would the price be reasonable enough if the value would be just the amount inXile paid to have the products made 'cause we would have already paid for them so there's no reason for them to ask for more on those. I don't know if this idea has any validity but this is just something I thought about.

sounds good in theory. mark it as (say) 15$ value and i will happily pay my 25% customs fee

My thoughts exactly. I second that motion! The value is the 'prime cost', i.e. the cost to make it.

[ElBartoME]

I'm not sure how they'll react if they see a $15 price tag on the pacakage. Not really realistic. The customs officers aren't dumb.
I would rather say something in the $50 - $60. You can't forget the actual value of the game itself.

It's a tricky situation...

[imhotep]

If they put low enough value, e.g. that $15, it will most likely pass through customs with ease. And paying VAT and duty from that sort of a price is not a big issue.

However, if they open the package and find out about the Kickstarter pledge or are otherwise knowledgeable about it, this issue remains:

--- Our legal system does not know of these kinds of donations to companies that then give us rewards. Charity is different: Here, one must get a permit to hold a fund-raising campaign and that cannot be obtained for any other than humanitarian purposes. And a specific requirement for fund-raising campaigns is that the backer does not receive any form of compensation. All this may lead to that they consider the donation as a purchase and the whole pledge amount becomes the price of item. Then we are talking about that 30% on top of the pledge which can be quite high in relation to the reward. This is a very problematic scenario.

[imhotep]

I'm not sure how they'll react if they see a $15 price tag on the pacakage. Not really realistic. The customs officers aren't dumb.
I would rather say something in the $50 - $60. You can't forget the actual value of the game itself.

It's a tricky situation...

I agree. There is fine line to be walked.

[Tronite]

I'm not sure how they'll react if they see a $15 price tag on the pacakage. Not really realistic. The customs officers aren't dumb.
I would rather say something in the $50 - $60. You can't forget the actual value of the game itself.

It's a tricky situation...

I don't know about adding the value of the game content on the disc to the final value 'cause we have already paid for the game to be made so I don't see the need of us paying for the game content again. I don't know, maybe that's just my sleepy reasoning but the value should be only the cost of all the extra stuff you get and the disc (don't know if there is any money going to putting the game on the disc) but of course there comes the question of what the customs think is the right price for it, does it have to be the selling price of the game or can it be the cost of the disc.

[ElBartoME]

I don't know about adding the value of the game content on the disc to the final value 'cause we have already paid for the game to be made so I don't see the need of us paying for the game content again. I don't know, maybe that's just my sleepy reasoning but the value should be only the cost of all the extra stuff you get and the disc (don't know if there is any money going to putting the game on the disc) but of course there comes the question of what the customs think is the right price for it, does it have to be the selling price of the game or can it be the cost of the disc.

Well, you don't pay again for the game. You just pay the taxes, that your country wants from you. That's the thing about digitally distributed games: You don't really have to pay these taxes.
But if you get a physical copy of the game, then this thing has a real (resale) value. And that is what matters.

[Vaux]

I'm not sure how they'll react if they see a $15 price tag on the pacakage. Not really realistic. The customs officers aren't dumb.
I would rather say something in the $50 - $60. You can't forget the actual value of the game itself.

It's a tricky situation...

All (pc) game cost less 30£ in UK, and you can found recent game for 10£, so yes, 15-20$ is totally realistic

[PlacidDragon]

I put down 250 dollars (Wasteland is my fondest gaming memory ever, just surpassing Fallout 1), and i expect to get royally #¤%"#%¤ by the customs here when the game gets shipped.

Any value over 30'ish dollars gets taxed, i think they even tax the shipping cost.. vultures that they are.

Still totally worth it though

[talkingcrows]

QUESTION
If I have a $1000 pledge,do I get ALL the previous rewards or just the one before it? Not that I'm necessarily looking for all of them mind you,but I thought it would just be the one before it..But the fact of the matter is I wanted the collectors edition box set with the map and shit.Assuming then ,that I CAN read..I tried to up my pledge by $50,and when the time came to select the reward tier,it switched automatically to the $50 reward tier
And it didn't keep my $1000 pledge reward in the box,and wouldn't let me pick it again.Being a computer idiot,and recently have been scammed by a dodgy dealer ,and knowing I know nothing about computers,and especially am highly dubious of Computers doing shit automatically ,devoid of intelligence,I then had to go back to the previous page ,in fear that clicked on the pledge would stick me in the $50 reward tier. So there is $50 less for the cause.
Can you give me any answers on this?

[Svetlovska]

As a UK backer, this is a real issue for me too. (Import duty + VAT @ 20% on the total declared value, + Post Office costs.) It strikes me it is not fraud that the front loaded amount is the donation/backing, and the shipped, boxed item is *indeed* a gift, in recognition of this. In case anyone thinks this is sharp practice, there is clearly a real cost of production of the physical item - if this comes to under 10 English pounds, then it is tax free. If this cost was the one declared on the invoice, I can't see there should be a problem, as it would only be a statement of fact. I do hope Inexile can address this - I agree it is a real limitation on upping my contribution to the next tier, and will be for anyone in Europe.

[JakBot]

QUESTION
If I have a $1000 pledge,do I get A...
...ere is $50 less for the cause.
Can you give me any answers on this?

I do not know exactly how Kickstart works, but I believe you aren't able to select the $1000 pledge reward because it's "full". 100 of the 100 available rewards have been given. If you had it chosen before, one should have freed up when you deselected it to allow you to re-select it. Unless some lighting finger got to it first, better double check which reward you have selected and possibly contact inXile/Kickstart for further assistance.

P.S. Sorry to hear about you getting scammed. As I understand it, you do get the reward you select and all the previous rewards as well (since the previous reward also gives you the previous reward), except with the new $2500 reward which doesn't give you previous rewards. This is a little off topic so I advice you to make a new topic if you wish to continue.

[GL1zdA]

Same problem in Poland. I recently payed about $40 VAT (duty is usually several % (3?) but VAT is the killer and it's also applied to shipping costs), because someone from the US has written a much higher value on the box (probably it had something to do with insurance). Since there are so many backers from Europe, the best way would be to import the boxes (with a reasonable value - the Collectors Edition would probably not be valued and $115 by customs) and then redistribute it (sending items inside EU is not a problem - there no VAT/duty). If you could investigate this matter now and tell us how much more we should pay, this would make matters much easier. If you can't do anything about it, just don't put a $10000 invoice in the package, or someone will look like an exploded blood sausage.