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Paypal - Please provide your tax ID number

Discussion in 'Ebay' started by jekkymett, Jun 8, 2015.

  1. jekkymett

    jekkymett Newbie

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    Hey, I've been selling on eBay for a while but today I got this email from Paypal:



    I have been buying and selling on US (dropshipping) and been successful and never had problems, but I live outside US, so what should I do?

    I have 2 options on Paypal:

    • The owner of this account is not a U.S. person or entity and is not subject to U.S. taxation.
    • The owner of this account is a U.S. person or entity and subject to U.S. taxation.

    My question is: is it safe if I just choose the first option?

    Has anyone experienced this? What should I do?

    Thanks
     
  2. toml3030

    toml3030 Elite Member

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    I'm fairly sure that there is a separate form they make you full out if you're a foreign entity. Also lying when asked to provide a tax id is a potential felony, so I would think long and hard before I give false info.
     
  3. jekkymett

    jekkymett Newbie

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    Well, if I say that I am not a US citizen and they ask me to proof it I will not be lying at all. So I hope that is not a problem.
     
  4. toml3030

    toml3030 Elite Member

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    In that case you still have to worry about your country having a tax treaty with US and US IRS sharing whatever you file here.
     
  5. jekkymett

    jekkymett Newbie

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    Yes that is why I am asking, I just dropship and make a few bucks, didn't know I had to worry about this things. Btw I don't know anything about this IRS stuff that's why I am asking here, to see if anyone had the same experience and if there's a easy way out.
     
  6. goodperson

    goodperson Elite Member

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    I just tell them you are not US citizen and proof that one with them. You won't pay any US tax.
     
  7. jekkymett

    jekkymett Newbie

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    Did you went through the same situation?
     
  8. toml3030

    toml3030 Elite Member

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    Yes, but if IRS gets involved, (which they may, for over $20K) it's up to YOU to prove that. IRS can basically confiscate first, then make you prove to them that you don't owe them money.
     
  9. jekkymett

    jekkymett Newbie

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    Oh I see, probably I will be loosing the business I've been building for months. Basically they just have to always try to take our money.
     
  10. toml3030

    toml3030 Elite Member

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    The tax man isn't that bad if you prepare for it. Remember, they tax you on your profits, and you can write off lots of stuff legally. If you keep meticulous records you can pretty much document that you're not really that profitable if you juggle the numbers.
     
  11. jekkymett

    jekkymett Newbie

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    The problem is that I am not sure how to do that. Would I have to form a llc or anything like that? Because I've read something about it. I'm not sure because not only I live outside US but I don't have anything like that formed, because I guess having a llc on US living outside the country is also different and all that stuff, it's very confusing for me. Besides that, I guess it would take a lot of work and money to do that so I really don't know what to do.
     
  12. toml3030

    toml3030 Elite Member

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    Research and prepare, dude.

    LLC's make sense in some situations. For example in certain states, you have much higher degree of anonymity if you operate through an LLC, and LLC's can buy and hold assets on its own, so it adds a degree of protection. Oh and btw, foreigners are not restricted against owning US based LLC's. The main tax advantage in an LLC is that as an owner you get taxed when you take assets from an LLC, but LLC itself isn't taxed on its profits. Since profits of an LLC aren't considered personal income of the owners, you can structure how you get paid by the LLC to minimize your tax liability.