Microsoft point transferd to currency

Taxation

An online merchant selling to international customers must pay careful attention to the tax implications of those sales. In general, once a company crosses a certain threshold of activity in a foreign country, the company becomes subject to income tax in that foreign country. In many cases, a company must have a "permanent establishment" in the foreign country before that country will subject the company to income tax on the company's business profits from that country. Thus, for example, an American online vendor of digitally- or physically- delivered products that does not have equipment or personnel in Japan generally would not be subject to Japanese income tax on its sales. However, there are important exceptions to this general rule. Some payments from customers in a foreign country may be subject to withholding tax by the foreign country (e.g., if the foreign country determines that the payments are "royalties" or other payments subject to withholding).

Electronically delivered goods should be treated like any other sale to a foreign customer. It generally is the responsibility of the customer/importer to declare their purchase and pay any taxes. Tax and tariff information on a country-by-country basis is available, or contact a Commercial Specialist in the targeted country for more information.

http://www.export.gov/sellingonline/eg_main_020781.asp

My understanding is states that require state tax and have specific digital content law may require residents to pay sales tax. Non residents may pay federal tax. Non US residents may not be charged tax but must be responsible for any fee's or tarrifs in their own country. See laws on pay pal etc. Xbox must register for VAT in the EU for it to happen that way and I am unsure of other countries.

In addition, a foreign country may impose other types of taxes, such as value-added tax (VAT), on sales into its jurisdiction. For example, as of July 1, 2003, the EU member states began taxing sales of electronically supplied products and services by non-EU firms to non-business customers located in the EU. Non-EU providers of electronically supplied products and services are now required to register with a tax authority in a member state and collect and remit VAT based on the VAT rate of the member state where their customer is located. Additional information regarding taxation of hardware and software around the world can be found at the Department of Commerce, Office of Information Technology and Electronic website.
http://www.export.gov/sellingonline/eg_main_020781.asp

As of right now a business does not have to charge sales tax unless the customer is located in the state that the business in located in. I believe the senate just passed a law in April that would make it where all online purchases are subject to sales tax. I'm not sure if the house has passed it yet or not. It is very likey that they will or have already done so. In short expect to start paying sales tax on things you buy online. Even if the customer is from outside the US they will still be subject to the tax because they are purchasing from inside the US.

This is why MS has gone away from the points system. It would be really hard to calculate tax on points instead of currency.

The Senate approved a long-anticipated Internet sales tax proposal on Monday, moving the legislation one step closer to enactment and paving the way for shoppers to pay sales tax on the majority of online purchases.
The so-called Marketplace Fairness Act would allow the 45 states (and the District of Columbia) that currently charge sales taxes to require large online retailers to collect tax on purchases made by their residents. The law would only apply to online sellers that have sales of at least $1 million outside of states where they have physical operations, like a store or a warehouse.

May 7, 2013: 10:21 AM ET
http://money.cnn.com/2013/05/06/pf/t...ote/index.html

What about states with no sales tax?
Five states currently have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. People who live in a state without sales tax won't be charged on goods they have shipped to their home state. However, businesses based in these states will have to collect sales taxes for items shipped to other places where there are sales taxes.

http://edition.cnn.com/2013/05/06/te...rnet-sales-tax

Again this is US sales tax and I imagine if somethign similar is done in the EU Microsoft will be VAT registered there and we will pay VAT not US sales tax. (It is tax for state residents of a state in the United States of America).

I know I pay customs fee's on imported items over a certain cost. If they chose to implement a fee for minor transactions under 10 pounds so be it.. It will mean the entire system will need a rehaul including the current requirements for who can charge for and has to pay VAT.

No non US residents are going to begin paying US tax but your own countries may already have fee's and laws on digital taxes and what you may have to pay. Worry about that before freaking out that xbox will charge non us residents sales tax lol

Quote:

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Originally Posted by The_Pikey

Are you serious? Are you even old enough to have a job yet alone pay taxes? Forums are not a competition to see who can get the brownest nose.

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yes i am old enough to pay taxes and i also have a job. and that is some pretty big talk coming from a people who does nothing but complain about an unfinished game.

oh and forums are not a place for you to complain night and day to see if people care about your opinion.

Quote:

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Originally Posted by acert assassin

Yes, I am old enough to pay taxes and I also have a job. And that is some pretty big talk coming from a person who does nothing but complain about an unfinished game.

Oh and forums are not a place for you to complain night and day to see if people care about your opinion.

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Fixed that for you. Just because we're on the internet does not mean you can throw proper grammar/pronunciation/punctuation out the window. = )

No big surprise here, seeing as how they made this "currency transfer" announcement weeks ago during E3. Sony's PSN cards work the same way as far as sales tax goes... again, no big surprise there.

I'm not sure what the big uproar is all about, MS said they were getting rid of the points system, in favor of using real currency. The points cards you used to buy at the store, were taxes up until about a year ago, at least here in Canada and those points already come with a tax attached to it. 800 = 10.00$ but try buying a 9.99 game with points, you'll see it changes to 680, saving you the tax (that you already paid on the 800 when you bought them). It's now just gone back to normal currency, which people can now do in their brain, where as some could not before. Nothing has changed, tax is a way or life and you do NOT pay US taxes. You pay your own countries tax, based on whatever region, state, or province you live in and the tax amount for that location.

I pay 13% in Ontario, no matter what I buy on live it is 13%, if where you live is less, then you pay less, if where you live is more, then you pay more. If its screwed up, then wait for them to fix it, as if your points changed to currency, then chances are you have a Beta Tab on your dashboard, and are enlisted in the beta by your choice and your choice alone. MS did not force you to apply for the Beta, if you weren't aware of the changes before applying for it, then you should not have applied. Beta's are meant to test out new features and report anomalies with in them, if there is something wrong with the tax amount for your country, log into the beta forums and report it.

They add the vat on top

Quote:

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Originally Posted by dominad

Taxation

An online merchant selling to international customers must pay careful attention to the tax implications of those sales. In general, once a company crosses a certain threshold of activity in a foreign country, the company becomes subject to income tax in that foreign country. In many cases, a company must have a "permanent establishment" in the foreign country before that country will subject the company to income tax on the company's business profits from that country. Thus, for example, an American online vendor of digitally- or physically- delivered products that does not have equipment or personnel in Japan generally would not be subject to Japanese income tax on its sales. However, there are important exceptions to this general rule. Some payments from customers in a foreign country may be subject to withholding tax by the foreign country (e.g., if the foreign country determines that the payments are "royalties" or other payments subject to withholding).

Electronically delivered goods should be treated like any other sale to a foreign customer. It generally is the responsibility of the customer/importer to declare their purchase and pay any taxes. Tax and tariff information on a country-by-country basis is available, or contact a Commercial Specialist in the targeted country for more information.

http://www.export.gov/sellingonline/eg_main_020781.asp

My understanding is states that require state tax and have specific digital content law may require residents to pay sales tax. Non residents may pay federal tax. Non US residents may not be charged tax but must be responsible for any fee's or tarrifs in their own country. See laws on pay pal etc. Xbox must register for VAT in the EU for it to happen that way and I am unsure of other countries.

In addition, a foreign country may impose other types of taxes, such as value-added tax (VAT), on sales into its jurisdiction. For example, as of July 1, 2003, the EU member states began taxing sales of electronically supplied products and services by non-EU firms to non-business customers located in the EU. Non-EU providers of electronically supplied products and services are now required to register with a tax authority in a member state and collect and remit VAT based on the VAT rate of the member state where their customer is located. Additional information regarding taxation of hardware and software around the world can be found at the Department of Commerce, Office of Information Technology and Electronic website.
http://www.export.gov/sellingonline/eg_main_020781.asp

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Good post.

My issue with all taxation is that in the online and digital universe things are sort of backwards as far as how taxes are assessed. If a customer physically goes to a state (I'm going by what happens here), and to a physical store and buys something, they pay whatever state sales tax is applicable. Go to Michigan, buy something, pay 6% Michigan sales tax. Now, as far as online sales-in the past people in my state, Michigan, were on the honor system unless a company had a physical presence (a store) in the state. You were to declare any online purchases you made no matter where the items came from and pay them along with your annual income tax returns.

The problem is this-now what our congress is saying is that internet sales occur where the buyer lives, no matter where the company is unlike physical purchases. So if I live in a state with no sales tax, I pay less for things than someone in a state with sales tax. This is also a mess for businesses who must collect different sales taxes based upon the state the buyer lives in. What should happen since they are insisting these taxes be paid, is the point of purchase should be from where the company is, not where the buyer lives, so companies only collect one state sales tax, and don't have to deal with 50 state sales tax rules.


With international sales it should be the same. If I go to Canada, I buy something and pay the VAT as well as any other applicable taxes. Depending upon the length of my stay I may be immune to that tax and so I may be able to get some of it back upon my declaration (I think at the point of exit from the country, IIRC). This also can depend upon how much I'm declaring in purchases based upon length of stay and the use of the item-personal, business, etc.

The point is, all points of sale whether physically or online should be considered as the business where the sale took place. For a company like MS, if headquartered in California then any sales tax I'm responsible for an online buy for the xbox should be California's. For international customers, I'd think they should be assessed taxes based upon MS's HQ locations in their countries. MS has HQs in lots of other countries.

I think dominad your assessments are correct and the taxation issue is a mess-one of the reasons some companies decide to not release DLC in some countries.

I just think in the internet world there needs to be a better determination of Point of Sale. As a small (very small) business owner my business is threatened by what our congress intends to do. As it is now, I collect sales taxes for Michigan customers since I'm in Michigan. What seemingly will happen is that I will be responsible to collect and keep track of, and pay out sales taxes for all 50 states, but the point of sale should be Michigan where I live and all sales taxes collected no matter where the buyer lives should be Michigan taxes. I'll have to stop doing business online and really totally because there's just no way I can keep track of all the paperwork that will be required to collect all those different state taxes.