European backers, Reward tiers, Duty and Tax hassle

[ButchinMelancholy]

Someone to answer my question between all this please?

[imhotep]

While I am certainly no expert in French customs whatsoever, I am betting that if you do not go for a very high pledge, there are no big worries.

With $65 and $115 pledges and reward tiers, the pledged amount and resale value are "somewhat close" to each other, and it will not matter "too much" which way your customs will look at it. In the worst case scenario the game is caught in the customs, and you will have to pay some tens of Euros of VAT and duty to get it (as 30% of $115 is still just ~26€). The customs might even use a lower value instead of the full pledge amount when determining the tax, meaning you pay even less. In the best scenario, the shipment will just ship through the customs directly to you with no cost. No matter what, you get the game when you pay the tax.

If you happened to pledge more, like $1000, it could be beneficial to find out how the customs will be looking at it according to the legislation and practice in your country. If they chose to take that 30 % on top of your $1000, you would get to pay an additional 230 €, which might be more than enough for many. I am using 30 % here as a rough guideline, I do not know what the effect of VAT and duty will be in France.

We should no forget, however, that some of us may view even those smaller taxes too problematic when juggling between reward tiers and other expenses. Or just hate the idea of having to deal with the customs. Hence, we would like to receive the game clearly marked with low enough value that is believable, or to have it imported and sent to us by a third party within EU.

[ButchinMelancholy]

Thanks, but I was referring to that question:

I don't really understand why there is this issue though. What's the difference between them shipping the item directly by their own or when you buy it on a web retail place? All those taxes are included in the price of the item, and you just pay some additional shipping costs eventually. So what is all this (common...) fanciful convoluted legislative mess?

And by the way I am clearly considering that contribution for its exceptional nature, but I can't permit myself to loose a cent more, so this is a real concern...

[Mabec]

I know that not everybody follows the FB page, so this picture should hopefully put some light in the tunnel.



Just wait and hold on tight to your AK.

[Aarionn]

Few month ago i purchased Kingdoms of Amalur signature edition. It was sold only in the USA so I had it shipped to my friend who lives in the USA. The game was CE edition with signed statue. Cost: $275. Now, CE game alone was I think $80 and statue without signature was ca. $100 if I remember correctly. But the signed package was $275.

Few days ago my friend sent this through USPS. Because package was no standard size, he had to pay $62 for it to be shipped to Germany. He put it as a gift with value of $100.

Now we will see what will happens next. Outcome can be:
1. I pay no additional charge .... not likely
2. I pay taxes on $100+$62
3.They go to internet and find out about $80 + $100 and I end up paying taxes on $180 + $62
4. They go to internet and find out about $275 and I end up paying taxes on $275 + $62

Somehow, I think that 2. or 3. are most likely what will happen here

[thatfool]

4. They go to internet and find out about $275 and I end up paying taxes on $275 + $62

Somehow, I think that 2. or 3. are most likely what will happen here

If they are doing their job properly it's going to be 4., potentially plus storage fees. If the product was sold in Germany they will instead take the German price as basis for their calculation.

Legally, of course, you're obligated to tell them that you purchased the product for $275 + $62 handling. If they suspect that this is what happened, they may even refuse to hand over the package unless you produce an invoice.

And this is also the entire problem this thread is about. People not wanting to pay their taxes. Technically we need to pay taxes on imported digital downloads too, so the OP is not actually about reward tiers being unevenly spaced, it's about the fact that it becomes a little harder to illegally avoid paying taxes on actual physical products.

That said, the best way to make life easy for us Europeans is attaching an invoice to the outside of the package that clearly states the products contained in the package and their retail cost - which is most likely not what we put in on kickstarter since not everything that we are signing up for is going to be in the package.

[imhotep]

OP is not actually about reward tiers being unevenly spaced, it's about the fact that it becomes a little harder to illegally avoid paying taxes on actual physical products.

As the author of that OP, I disagree.

Duties and taxes for separately delivered things are collected separately according to at least the Finnish law. In this case, we have these physical items and digital downloads. There is nothing illegal in shipping those rewards separately like mailing the former and emailing&downloading the latter.

Furthermore, it is not illegal in any way not to pay tax and duty from products with low price or value. In Finland, that limit is some 43 € (bought item) or 45 € (gifts). Other than that, avoiding tax payment may be illegal or at least morally questionable. But it certainly is not illegal to worry about arbitrary judgement at the customs, if the value of the boxed game is not known beforehand. ADDITION: as seen from the previous posts, the issue of the game price/value is not a very clear-cut problem at all.

I agree that much of the discussion under this topic is not directly worded to speak about uneven reward tiers as the OP. But those of us who want to live by the law but do not have unlimited money to throw at this thing are carefully looking at the situation. Those duties and taxes can make those early reward steps a bit steep. The majority of backers is not worrying about $1000 donations. Most backers pledge the lower reward tiers.

[imhotep]

I know that not everybody follows the FB page, so this picture should hopefully put some light in the tunnel.
Just wait and hold on tight to your AK.

Looks promising! I like the way they are taking in our input for the game contents and as a whole.

But it seems they have chosen to address this later on. Maybe they will not address this issue during the Kickstarter campaign.

[Aarionn]

4. They go to internet and find out about $275 and I end up paying taxes on $275 + $62

Somehow, I think that 2. or 3. are most likely what will happen here

If they are doing their job properly it's going to be 4., potentially plus storage fees. If the product was sold in Germany they will instead take the German price as basis for their calculation.

Legally, of course, you're obligated to tell them that you purchased the product for $275 + $62 handling. If they suspect that this is what happened, they may even refuse to hand over the package unless you produce an invoice.

And this is also the entire problem this thread is about. People not wanting to pay their taxes. Technically we need to pay taxes on imported digital downloads too, so the OP is not actually about reward tiers being unevenly spaced, it's about the fact that it becomes a little harder to illegally avoid paying taxes on actual physical products.

That said, the best way to make life easy for us Europeans is attaching an invoice to the outside of the package that clearly states the products contained in the package and their retail cost - which is most likely not what we put in on kickstarter since not everything that we are signing up for is going to be in the package.

Well, I agree with you in one that here it is me who are trying to get this item without getting to pay taxes. I don't see it as illegal (but not moral?... maybe) as in the end it is my friend who is sending gift to me (officially). I know number of cases when the USA citizens that currently are living here in Germany are regularly getting packages from the USA (books particularly) and are also trying to avoid being taxed by sending it by their friends/family as a gift. I don't see anythin abnormal here.

But I don't agree with you that this thread is about ppl not wanting to pay taxes. We all know we have to pay them if we purchased something abroad and it is getting shipped by the store to us. That is not an issue here. My issue here is that I pledged $250 for item that has same retail value of future CE edition and I am paying extra just to support the company. If this is not how it should be seen here, that I want inXile to offer retail prices of CE box as a pledge and I will go for it.

[Aarionn]

Dear friends,

today I am extremely happy to report to you that my package arrived and I DIDN'T have to pay any taxes!

Great!

Package was sent through USPS from my fiend (not a store) as a gift with the value of $100.

Now that I think I will have my reward shipped to my friend in the USA (then I don't have to pay int. postage) and he will send me the package as a gift. Standard airmail is anyhow around $15 for a boxed game.

[Thoth]

For me it's ok if the box will be marked as gift, or will have an invoice of 5-10$. In Romania that's enough to avoid taxation. Bought a lot of electronics marked this way from China, never paid any taxes.

[Ranger Fin]

This international shipping is new to us too. Last time we shipped physical goods internationally we were at Interplay and we had distribution offices in every major territory. Now our distribution department is Brian and I, sitting in Newport. Oh, the joys of being a small developer...

Or plans are developing, so nothing is set in stone. Feel free to help us solve this.

What we were thinking is that our invoice and customs forms have very little to do with the amount of money actually pledged. It is based on the value we put on the item shipped.

For example, if you pledged $50 for the Box version, you get a list of stuff. Boxed version, digital version, digital soundtrack, digital art book, and the Novella. The only thing we are shipping you is the Boxed game. We would put a customs value of $25 on that. The other $25 is for the digital items you will download. No where on our forms will the other items or your $50 spent be used.

We think this is fair, and legal, if someone has a better solution, let us know.

[Ranger Fin]

To continue that thought, even if you pledged $1000, I am still only shipping you less than $100 in actual goods. We would put the actual goods estimated cost on the custom forms. No where on those forms does it ask us how much you paid...

[Grim Monk]

Are there any additional costs for shipping inside the USA?

[Brother None]

Are there any additional costs for shipping inside the USA?

No.

PS: That sounds like a GREAT solution, Fin. Loving it.

[Aarionn]

This international shipping is new to us too. Last time we shipped physical goods internationally we were at Interplay and we had distribution offices in every major territory. Now our distribution department is Brian and I, sitting in Newport. Oh, the joys of being a small developer...

Or plans are developing, so nothing is set in stone. Feel free to help us solve this.

What we were thinking is that our invoice and customs forms have very little to do with the amount of money actually pledged. It is based on the value we put on the item shipped.

For example, if you pledged $50 for the Box version, you get a list of stuff. Boxed version, digital version, digital soundtrack, digital art book, and the Novella. The only thing we are shipping you is the Boxed game. We would put a customs value of $25 on that. The other $25 is for the digital items you will download. No where on our forms will the other items or your $50 spent be used.

We think this is fair, and legal, if someone has a better solution, let us know.

That is great news. Thank you very much for your effort to help us international customers deal with potential tax issues.

thx very very much again

[Haggbart]

This international shipping is new to us too. Last time we shipped physical goods internationally we were at Interplay and we had distribution offices in every major territory. Now our distribution department is Brian and I, sitting in Newport. Oh, the joys of being a small developer...

Or plans are developing, so nothing is set in stone. Feel free to help us solve this.

What we were thinking is that our invoice and customs forms have very little to do with the amount of money actually pledged. It is based on the value we put on the item shipped.

For example, if you pledged $50 for the Box version, you get a list of stuff. Boxed version, digital version, digital soundtrack, digital art book, and the Novella. The only thing we are shipping you is the Boxed game. We would put a customs value of $25 on that. The other $25 is for the digital items you will download. No where on our forms will the other items or your $50 spent be used.

We think this is fair, and legal, if someone has a better solution, let us know.

These are great news! FYI the tax limit in Norway is just about equivalent to $25 with today's exchange rates (shipping not included, but shipping cost must be specified...or it will be calculated in the total value), anything above that will get you 25% VAT and about 20usd custom's fee on the entire value.

If you can make the deluxe edition appear as $25, I will up my pledge at once!

[imhotep]

For example, if you pledged $50 for the Box version, you get a list of stuff. Boxed version, digital version, digital soundtrack, digital art book, and the Novella. The only thing we are shipping you is the Boxed game. We would put a customs value of $25 on that. The other $25 is for the digital items you will download. No where on our forms will the other items or your $50 spent be used.

We think this is fair, and legal, if someone has a better solution, let us know.

I think that this is about the best possible compromise there is! Great news and keep up the good work!

And as Haggbart noted, in some countries (like Finland) the shipping cost is also added before taxes and duties are calculated. So please include the shipping costs too. If the shipping is valued at $15, the total would be $40. In 2013, that will be over the future 20 € or so limit, supposing that the USD-EUR rate will not change dramatically. We can live with it. ADDITION: In many countries gifts have a higher threshold, and it seems to me that in Finland the gift value will stay at 45 € in 2013..

I suppose that there will never be a fixed price that suits every country as each has different limits. Putting too low a price on the item would just cause unfounded suspicion, and perhaps then our German fellows would then have the goods confiscated at their customs in the worst case?

Finally, please send us an invoice via email when shipping the items. If need be, we need to be able to show an invoice that matches the statements on the package and inside the package. Nowadays, there is a possibility to do the customs declaration also on-line. ADDITION: In case of a gift, not an invoice but "an official" statement / proof of value as the manufacturer.

[ButchinMelancholy]

For example, if you pledged $50 for the Box version, you get a list of stuff. Boxed version, digital version, digital soundtrack, digital art book, and the Novella. The only thing we are shipping you is the Boxed game.

Does this mean the Novella is digital or included with the game?

Thanks anyway for the effort.

[imhotep]

Forgot to mention, upped the pledge immediately after seeing this issue being in good hands.