Home – New Forums Money matters Paypal & Tax Online Business

  • This topic is empty.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • #998885
    ryan.y0
    Member
    • Total posts: 1
    Up
    0
    ::

    Hi, I have a few questions if anyone has any advice on this?

    Bit of back story:

    So i have an online business that I completely run from paypal.
    All incoming money is coming from USA (non taxed) (nothing involves Australian businesses)(No physical products sold)

    I never transfer money to my AU bank account

    Do I only have to pay tax when the money reaches my Bank Account?

    I don’t have an issue keeping the money in PayPal

    Thanks!

    #1216568
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    ryan.y0, post: 261105, member: 111830 wrote:
    Hi, I have a few questions if anyone has any advice on this?

    Bit of back story:

    So i have an online business that I completely run from paypal.
    All incoming money is coming from USA (non taxed) (nothing involves Australian businesses)(No physical products sold)

    I never transfer money to my AU bank account

    Do I only have to pay tax when the money reaches my Bank Account?

    I don’t have an issue keeping the money in PayPal

    Thanks!

    If you own the business and are an Australian tax resident then you are taxed on worldwide income. That means income derived outside Australia is also generally taxable here. Whether or not you repatriate the funds or profits back to Australia is generally not relevant.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1216569
    Rowan@quaotic
    Participant
    • Total posts: 712
    Up
    0
    ::

    Paypal is required to submit statements of earnings of its Australian business users (you have to have a business account to accept payments other than family gifts) to the ATO so you are not safe there either.
    Better to think of yourself as a professional business and do everything right. A responsible business pays its taxes, and charges customers extra to cover those sorts of expenses.

    #1216570
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    0
    ::

    I had this set-up when I owned US and Canadian websites that generated income – I paid my tax to the ATO, not the IRS.

    That said, on the US side, you still have an obligation to file a tax return and you will be credited by the IRS with taxes paid in Australia.

    All, of that said however, I could not tell you how many people actually meet all of their obligations but it is important to have the correct info before making decisions that could have future implications.

    #1216571
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    Paul – FS Concierge, post: 261108, member: 78928 wrote:
    I had this set-up when I owned US and Canadian websites that generated income – I paid my tax to the ATO, not the IRS.

    That said, on the US side, you still have an obligation to file a tax return and you will be credited by the IRS with taxes paid in Australia.

    All, of that said however, I could not tell you how many people actually meet all of their obligations but it is important to have the correct info before making decisions that could have future implications.

    That’s all pretty spot on Paul. The only thing I would add is that the ATO is getting better at targeting all levels of tax avoidance. In the last five years they have quietly built a massive data gathering and matching regime which collects data from a large variety of sources automatically. In the past this information was simply not available. So these days the ATO are data matching banking information automatically and comparing with your EFT merchant income (including PAYPAL). They also cross check state vehicle registers and state land titles registers to ascertain what assets you are buying and whether your income supports it. In the near future there really will be no hiding.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.