PayPal Tax Question

Email Marketers

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Hello,

If you open a PayPal account in France and use it for accepting payments, and you're not withdrawing funds to your bank account or credit card, but rather you are just spending that balance online, is there any way that PayPal report your earnings to the France authorities?
 

plottsch

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Hello,

If you open a PayPal account in France and use it for accepting payments, and you're not withdrawing funds to your bank account or credit card, but rather you are just spending that balance online, is there any way that PayPal report your earnings to the France authorities?

Speaking from US experience: PayPal does report your earnings. However, if you spend that balance on business expenses, you can deduct that from your taxable income and pay nothing.
 

Email Marketers

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Speaking from US experience: PayPal does report your earnings. However, if you spend that balance on business expenses, you can deduct that from your taxable income and pay nothing.
Thanks for the reply. Hopefully, we will hear about more experiences.
 

orangejuice

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I have seen instances in the past where people have got letters from HMRC (UK) especially when kids are selling online using the parents account, causing a bit of a mess.

As far as I know, it has nothing to do with what you withdraw. Reporting is based on 'funds availability' in the same way they are accounting for in your books the moment they are in your PayPal account and not when you withdraw them to another bank account.

Your idea is a common one: use a PayPal debit card to use it buy other things online and ideally the tax authorities will not catch on. This was definitely true in 2011 or earlier, but these days, PayPal directly reports to the relevant tax authorities though I don't know the specific triggers for when they do/don't.
 

mystique07

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It’s always good to report your earnings in your tax return so that you can avoid fines later. This is common in most countries
 

Jung

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Maybe they report for the US/UK, but what about other countries, like, i dont know, Greece, Mexico, Balkanistan, Middle eastern countries?

Also interested about this, because it makes sense that they'll be liable in the US and UK, but what about "less popular" countries..
 

c4labs

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Yes.
If you pay something with PayPal for your business (hosting, etc), you deduct the cost to reduce your taxable income.
If you use the funds to buy your personal food/clothes/etc, you need to declare the revenues. Otherwise, it is a tax fraud.

France tax authority checks PayPal accounts, believe me. They have access on request.
I had one day a request for an audit by the French tax authority (the question was: Do you own another bank account than the account we know (any e-wallet solution is also concerned)). Then, I could have lied and maybe they would have not said anything but I was not receiving any funds on it so I gave them the account email/end of year reports. No idea if they checked it. PayPal has banking licenses/payment licenses which force them to cooperate with any tax authority (obiously not with ALL tax authorities from ALL the countries).

It is your own choice to take a risk and not declare the revenues. No one can tell you if they will check and when they will check.
 

yarcanhack

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I know that it is taxed in the European country, but I don't know how much it is. Isn't anything provided over the incoming deductions?
 

LeDucbb

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The only way Paypal would report your earnings would be under specific request from the appropriate authorities.
France tax authority would check your PayPal account only if they already tracking you for some reasons.
Luckily you are not a french citizen or citizen so you are definately safe from the french tax radar... but be aware of your local tax warrior :)

This works for all the big countries in the EU !
 
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