Is Processing Payments Illegal? (Paypal Business)

georgetoons · May 3, 2024

Hi bhw fam,

So I wanted to ask because I don't understand very but have a gut feeling about so please enlighten me.

A guy was asking around about if anyone has Paypal Business acc, I then told him that I have one.

This is what he wants:

He wants me to connect my Paypal to his e shop that sells whiskey to accept payments, I still have not done it but he gave me log ins to the wp-admin.

I logged in and saw he has like over 90k in sales and the site is performing very well, the deal was that I will get 15% of any sales that happen through paypal.

I then asked him why does he not just open his own? He said that he lives in a country in Asia that does not have Paypal available.

I then thought maybe he is laundering or something, I asked him for some more proof to see if the business is legit and he sent me some screenshots of the active ad campaign he has running.

Can I get in trouble either way since I am accepting payments for a different business?

Is he doing something else sketchy?

If anyone know of a scam like this please tell me,

Thank you in advance

andyframpton · May 3, 2024

The risk when giving anyone access to your account is what they do with it.
Chargebacks can happen up to 180 days later. So you pay the person their money and they don’t send the item.
Paying tax. If you have to.
There is a lot to go wrong but it’s also a chance you take. 15% of 90k is a lot of money for doing nothing.
Personally I would weigh up the risk to reward ratio.

georgetoons · May 3, 2024

andyframpton said:
The risk when giving anyone access to your account is what they do with it.
Chargebacks can happen up to 180 days later. So you pay the person their money and they don’t send the item.
Paying tax. If you have to.
There is a lot to go wrong but it’s also a chance you take. 15% of 90k is a lot of money for doing nothing.
Personally I would weigh up the risk to reward ratio.

Yeah the only reason I am considering it is because of the amount but I don't want that to cloud my judgement, I saw proof that he has many completed sales in his woocommerce dashboard but how can I know if he is sending the items hmm...

Also the tax part is what confuses me, is the tax counted through the money recieved to the bank or through his woocomerce settings, like what does the tax department look at?

I asked him and he said he will be paying all the taxes on his end and for me not to worry

also... is it illegal?

andyframpton · May 3, 2024

The tax thing you need someone to look into as his company I guess is registered to a different country from your PayPal for he would just open a PayPal himself.
But are you liable for tax as you are making money off this. As I said ask someone more qualified than me.

I don’t believe it’s illegal as you are just processing payments for them. Will PayPal see it as a breach of their terms and conditions? Yes.

raffael213 · May 3, 2024

The tax is on the money he or you receive to the bank account. If his doing this he probably ask you to send the money as a gift to a personal Paypal account. The problem with your tax is based on the legislation in your country.
First thing is that Paypal will take 3.6 to 5.4% from the amount of each transaction. 90k x 5%(as an example) - will go to Paypal.
from the money you withdraw to your bank, your gov will take 20%(ex), that means that 90k x 15%(your share) = 13500$ you will pay 20% tax = 2700$ in taxes for you.

ask a accountant in your country about how you can withdraw the money, how to do it as a business or personal account, what is the exact taxes that you will pay.
in my country, the VAT is 19% but as a business I pay 48% from everything I earn. each country has different taxes. Also as a individual I pay other taxes, if I earn over a certain amount.

You should think good before giving an answer, because you can find other payment processors that will integrate paypal for you and you will not need to give 15% out from your earnings.
To me this sound a little sketchy ...

georgetoons · May 3, 2024

raffael213 said:
The tax is on the money he or you receive to the bank account. If his doing this he probably ask you to send the money as a gift to a personal Paypal account. The problem with your tax is based on the legislation in your country.
First thing is that Paypal will take 3.6 to 5.4% from the amount of each transaction. 90k x 5%(as an example) - will go to Paypal.
from the money you withdraw to your bank, your gov will take 20%(ex), that means that 90k x 15%(your share) = 13500$ you will pay 20% tax = 2700$ in taxes for you.

ask a accountant in your country about how you can withdraw the money, how to do it as a business or personal account, what is the exact taxes that you will pay.
in my country, the VAT is 19% but as a business I pay 48% from everything I earn. each country has different taxes. Also as a individual I pay other taxes, if I earn over a certain amount.

You should think good before giving an answer, because you can find other payment processors that will integrate paypal for you and you will not need to give 15% out from your earnings.
To me this sound a little sketchy ...

In my country it is 24% VAT, will the money be taxed when I withdraw it to my bank or when I go to take it out at the atm? For example, if I withdraw it from PayPal and then put it all into binance converting it to Crypto will I still be taxed as the transactions are visible?

Also do you believe I will have a problem seeing as the paypal business is registered to my business but the money is coming from his?

Also seeing as you say this but he told me I won’t need to pay any taxes is sketchy.

Usually when it sounds to good to be true it is as we all know….

Maybe he is running facebook ads to get sales and then payments are accepted through others like me for example.. i send him the money instantly as he has requested and then he never sends the item so my paypal will end up in a negative balance due to customers opening disputes? That is a thought I had also and starting to think whether it is worth the risk because it will be a huge sum negative on paypal if that is the case…

georgetoons · May 3, 2024

andyframpton said:
The tax thing you need someone to look into as his company I guess is registered to a different country from your PayPal for he would just open a PayPal himself.
But are you liable for tax as you are making money off this. As I said ask someone more qualified than me.

I don’t believe it’s illegal as you are just processing payments for them. Will PayPal see it as a breach of their terms and conditions? Yes.

raffael213 said:
The tax is on the money he or you receive to the bank account. If his doing this he probably ask you to send the money as a gift to a personal Paypal account. The problem with your tax is based on the legislation in your country.
First thing is that Paypal will take 3.6 to 5.4% from the amount of each transaction. 90k x 5%(as an example) - will go to Paypal.
from the money you withdraw to your bank, your gov will take 20%(ex), that means that 90k x 15%(your share) = 13500$ you will pay 20% tax = 2700$ in taxes for you.

ask a accountant in your country about how you can withdraw the money, how to do it as a business or personal account, what is the exact taxes that you will pay.
in my country, the VAT is 19% but as a business I pay 48% from everything I earn. each country has different taxes. Also as a individual I pay other taxes, if I earn over a certain amount.

You should think good before giving an answer, because you can find other payment processors that will integrate paypal for you and you will not need to give 15% out from your earnings.
To me this sound a little sketchy ...

Hey I just thought of something, If from paypal I firstly transfer the money to a personal paypal account and then the person with that account withdraws to his bank will we still be taxed like a business?

Bish · May 3, 2024

You have to report any earnings above 10k

georgetoons · May 3, 2024

Bish said:
You have to report any earnings above 10k

Is that based on monthly? and I need to report it from the time it goes in my bank account or paypal?

Thank you

raffael213 · May 3, 2024

georgetoons said:
In my country it is 24% VAT, will the money be taxed when I withdraw it to my bank or when I go to take it out at the atm? For example, if I withdraw it from PayPal and then put it all into binance converting it to Crypto will I still be taxed as the transactions are visible?

Also do you believe I will have a problem seeing as the paypal business is registered to my business but the money is coming from his?

Also seeing as you say this but he told me I won’t need to pay any taxes is sketchy.

Usually when it sounds to good to be true it is as we all know….

Maybe he is running facebook ads to get sales and then payments are accepted through others like me for example.. i send him the money instantly as he has requested and then he never sends the item so my paypal will end up in a negative balance due to customers opening disputes? That is a thought I had also and starting to think whether it is worth the risk because it will be a huge sum negative on paypal if that is the case…

the tax liability is when the money goes to your bank account and you need to pay the tax for it at the end of that month or next month or year - this is based on your country regulations.

The money coming from his website in you your paypal account - with another business name - this is a breach of paypal terms of use, so if they find out, your account will be closed and all the money there blocked (in some cases you can recover that amount in about 180 days, if you can provide them with all the paper they ask).

check how old is his domain via whois and wayback machine, because if he's not sending the products, the website should not be older then a few months.

Like you mentioned, if is to good to be true, probably isn't.
Also, the orders in website dashboard can be faked, so he may be running a fake business to process stolen cards and if you use your paypal account, everything will get back to you.

Do your research and check every little thing connected to his business, before going forward with this.

What I mentioned you here, are just what I would think if someone is coming to me with the same deal, but that doesn't mean the guy you mentioned is doing any of this.

FusionProxy · May 3, 2024

I think you should ask him for some guarantee, because if you send him money and then he tells clients to start a dispute you can be in trouble. But looks interesting to be honest

georgetoons · May 3, 2024

raffael213 said:
the tax liability is when the money goes to your bank account and you need to pay the tax for it at the end of that month or next month or year - this is based on your country regulations.

The money coming from his website in you your paypal account - with another business name - this is a breach of paypal terms of use, so if they find out, your account will be closed and all the money there blocked (in some cases you can recover that amount in about 180 days, if you can provide them with all the paper they ask).

check how old is his domain via whois and wayback machine, because if he's not sending the products, the website should not be older then a few months.

Like you mentioned, if is to good to be true, probably isn't.
Also, the orders in website dashboard can be faked, so he may be running a fake business to process stolen cards and if you use your paypal account, everything will get back to you.

Do your research and check every little thing connected to his business, before going forward with this.

What I mentioned you here, are just what I would think if someone is coming to me with the same deal, but that doesn't mean the guy you mentioned is doing any of this.

Thanks I had not thought of looking up domain whois, it was registered on 2024-03-26.... and he already has 90 orders.... Not very believable if you ask me and I might just not do it, even if its legit I think its not just worth the risk

Thank you for taking the time to help me bro your a legend

Is Processing Payments Illegal? (Paypal Business)

georgetoons

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andyframpton

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georgetoons

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raffael213

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georgetoons

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georgetoons

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Bish

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FusionProxy

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