Paying Tax for SKype Service

If you use only the free features of Skype, you need not pay any taxes.
Period.
However, if you are a subscriber to one or more of Skype’s fee-based services, you might be obligated to pay taxes. Subscribers whose billing address is in a country that is a member of the European Union will be charged Value Added Tax (VAT) when they purchase services. But subscribers elsewhere, including the United States, will not be charged any taxes. This, however, does not necessarily mean you don’t owe taxes on payments for those services!
In the United States a form of tax called the Sales & Use tax is levied at the state level, and sometimes the local level, on goods and services you purchase outside of your home state. If such a tax is not collected by the seller, then you—the buyer—are required by law to pay it. This is a complex issue beyond the scope of this book, and so you should check with your local tax authority or seek professional tax advice regarding the rules for making Skype purchases.
If you subscribe to Skype’s fee-based services and live somewhere other than the European Union or the United States, you will need to determine the tax status of Skype purchases for yourself by checking with the tax authorities for your jurisdiction.

Seven Skype Alternatives

Skype isn’t the only game in town! Other Internet telephony providers are even cheaper than Skype for some types of calls. You can mix and match alternatives to Skype to get the overall best deal. Don’t be afraid to shop around for the best deal. Using the tips that follow, and by searching using an Internet search engine such as Google (using search terms such as “VoIP” and “softphone”), you will quickly find plenty—and in some cases cheaper—alternatives to Skype. However, a few words of caution. When considering alternatives to Skype, be sure to consider issues such as voice quality (Skype’s voice quality is very good), privacy, security, ease of use, support for advanced features such as video and chat, and software and hardware compatibility with your PC.
To get you started, here are some alternatives to Skype:

􀁕 www.voipstunt.com is a softphone that you install on your PC which allows you to make free calls to other VoIPStunt users. In addition, it allows you to make free calls to regular landline phones in several countries, including the United States, Canada, United Kingdom, Australia, and New Zealand. Even more amazing is the fact that you can also call mobile phones for free in some of these countries, including the United States and China. More amazing still is that you can get a free regular dial-in number, although the list of countries for which you can get them is more restricted.
􀁕 www.voipbuster.com offers free calls to regular landline phone numbers in the following countries: Andorra, Australia, Austria, Belgium, Bulgaria, Canada, Chile, Colombia, Croatia, Cyprus, Denmark, Estonia, Finland, France, Georgia, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Luxembourg, Malaysia, Monaco, Mongolia, Netherlands, New Zealand, Norway, Panama, Peru, Portugal, Puerto Rico, Singapore, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, and Venezuela. Like VoIPStunt, VoIPBuster offers free regular dial-in numbers for some countries. Check the VoIPBuster website for details and restrictions.
􀁕 www.gizmoproject.com is a softphone with features and services that are very similar to Skype.
􀁕 www.freeworlddialup.com is a service that is based on open standards and so can work with different softphones. It offers free softphone-to-softphone calls, and free calls to some regular phones.
􀁕 www.google.com/talk is a softphone from the folks at Google. It enables you to speak for free with other Google Talk users, and supports instant message chat. Unlike Skype, you can use Google Talk to chat with other chat message client programs.
􀁕 messenger.yahoo.com is an instant messaging chat client that also supports free PC-to-PC voice calls. It also offers low perminute rates for calls to regular phones.
􀁕 messenger.msn.com is a softphone that supports voice calls, video, and chat messaging.

Economic Considerations on Skype

Your regular and mobile phone bill is normally made up of two parts: cost of calls, and fixed charges and taxes. You can use Skype to reduce the overall cost of your phone calls, and reduce—in some cases even eliminate—your fixed charges and taxes.
The cost of an individual call is the duration of the call, measured in minutes (and sometimes fractions thereof), multiplied by the call rate. For example, a 7 minute call at a call rate of 5 cents per minute will cost you 35 cents. The lower the call rate for a given destination, the lower your cost of calls to that destination. You can use Skype’s very low per minute call rates to save money on your overall cost of calls.
Over the years, most people have seen their phone bills accumulate lots of fixed charges and taxes. Indeed, before I switched to Skype, fixed charges and taxes amounted to 56 percent of my regular telephone bill! Some taxes relate to your cost of calls and so decline as your cost of calls decrease. But most are truly fixed, in the sense that even if you don’t make a single call during any given month, you still have to pay them. To eliminate the fixed charges and taxes, you’d need to reduce the number of phone lines entering your home or eliminate them altogether. By using Skype you can do this and so avoid many fixed charges and taxes—and it’s all legal!