PayPal Policy Updates - CRS

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medicineball
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medicineball

PayPal Policy Updates - CRS
« on: February 08, 2017, 10:13:09 PM »
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Hi everyone,

today I got an e-mail from PayPal notifying me about their upcoming TOS change. I read through it a bit and noticed changes related to CRS. To be more specific, I'm quoting from their website:

Quote
Where PayPal is a reporting financial institution under these laws., if a user qualifies as a specified U.S. person under FATCA Law and/or as a reportable person under CRS Law and assuming the FATCA Law and CRS Law impose obligations on PayPal (in either case, as a “Reportable Account Holder”), this information will be automatically exchanged by PayPal with the Luxembourg tax authorities. The Luxembourg tax authorities will exchange this information with the U.S. Internal Revenue Service if FATCA Law applies and/or, if CRS Law applies, with the competent authority or authorities of your respective country or countries of tax residence that are participating jurisdictions under CRS Law.

Here's a link to a PP page covering it in detail:

Code: [Select]
https://www.paypal.com/gf/webapps/mpp/ua/facta-full
I found this forum by trying to google more information about their current policies and the upcoming changes. In fact, this is the only forum I've found the issue is discussed on.

Users on this forum seem informed about these kinds of things so I wanted to ask about my specific case.

- I have a verified PP account. It was created at the beginning of 2016 and it is verified and linked to my bank account - I did it mainly to remove receiving/sending limits.
- over the course of the year, I received money to this account. The last transaction happened before the end of 2016. There were no outgoing transactions (I didn't pay for anything, I didn't send any money to my bank account - I didn't spend any of it)
- the total amount received is between 10k and 20k USD - not a huge sum, but it's a bit more than the average annual salary in my country
- the money was not associated with anything super shady / illegal etc. - it was a part of the proceeds from selling software online

Here's the thing - I didn't report this activity to my local tax collecting office. I'd rather not do that - explaining the origin of the money might not be that easy since I don't have access to individual purchase logs - this was handled by another guy from another country, with no formal contract between us, and he hasn't reported anything either. Besides that, even if everything was 100% above the board, the law is not fully caught up on digital goods, my college student status might suffer (yes, if your profit is not very high, running a small business as a student is not actually favorable in my country - it comes with a lot of administrative BS and you lose lots of benefits you would have if you had no income. For an analogy, think welfare in the US - those on welfare are usually better off not having any job at all, at least from a financial standpoint). If it's any help, I'm from the EU.

I wanted to add that the software is still being sold and the money ain't that bad. We're just not using PayPal anymore, but payment methods that are easy to convert directly to cryptocurrencies without raising any alarm. This is yet another reason I don't want to report this income, because the site URL might be given to the authorities and that'd make things a bit more complicated, to say the least.

I know I was careless and messed up big time and should've informed myself before creating the account. Anyways, the new TOS is supposed to take effect at the end of April.

Here's my question: If I spend the PP balance online (no, I wouldn't be buying stuff from local e-shops, I'm not THAT dumb) and close the account before the new TOS take effect, how likely is it that my local authorities will get access to a list of transactions from the account? To put it in another way, has PP been snitching on their users for a while or is it a new thing?

I'll be thankful for any advice I can get.
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