Do I have to declare the money earned in PayPal to the Treasury?





It is becoming more and more frequent that commercial transactions between stores and online commerce are channeled through a very special payment method such as PayPal. To the point that you can ask yourself from now on if I have to declare money earned in PayPal to the Treasury. This is a question that raises many doubts among those responsible for digital companies.

Before having an answer to this informative demand, you should know in depth what this means of payment is and what it consists of upwards in recent years. Well, paypal is an American company that operates an online payment system almost worldwide that supports money transfers between users and serves as an electronic alternative to traditional payment methods such as checks and money orders.

Certainly, many of these online stores support this payment to channel the purchases of their customers or users. To the point that it can become an exclusionary system. In any case, you should know that this is the payment system preferred by online stores, auction sites and other types of commerce. In any case, with a series of commissions that vary in size according to the functionalities and characteristics that the person who receives the payment hires. 

Paypal: what does it consist of?

It is a truly innovative and avant-garde means of payment that allows users to make purchases and transactions without sharing your bank details with the businesses in which they want to make a purchase. In this way, you can assure your online store visitors that you will not have access to their data. This aspect is very important because at the end of the day it will help to break down a common barrier in electronic commerce, and not very relevant, the fear that bank details will be misused.

While on the other hand, it is true that customers of an online store that use PayPal can pay for their purchases using the balance of their own account, bank accounts or credit cards. Although in any case, another aspect that you must take into account from now on is that the requirement to start using the Paypal system in your online store is to open an account.

The structure in this means of payment is not very complex since it is based on offering a payment system that allows its users to make payments and transfers through the Internet without sharing financial information with the recipient, with the only requirement that they have email.

What is this payment method for?

With this system you can perform different operations or transactions. While on the other hand, it also enables a channel where you can buy a series of products or items with significant discounts on their original price. They range from booking a vacation package to the latest mobile phone models. As it has been developed in a wide range of commercial digital platforms. In any case, the situations in which its usefulness is greater are those that we expose below:

Pay for purchases made over the Internet.
Collect sales made over the Internet.
Send and receive money between family, friends or individuals.

Another factor that users should know is the function or properties of this online platform. How does PayPal work? Well, in the way that we are going to propose from now on:

Sending money or payments through Paypal is free. The recipient can be any person or company, whether or not it has a Paypal account, that has an email address. In all cases, you can choose the payment option to facilitate its use among individuals and that can be the following:

With credit or debit card and where almost all the formats that are enabled internationally are admitted.

Paypal Account Balance. That is to say, through this balance you can either make purchases within this digital platform, or divert a part or the total balance that is available up to that moment. And with a higher limit than the balance, without major restrictions on monetary operations.
As a bank account.

How to open an account with these characteristics?

First of all, you have to choose the country from where the operations will be carried out, as well as the language (English, Spanish, French, German, etc.) and of course the account modality. It is precisely this last section that presents its greatest difference as it has several proposals that you can subscribe from now on:

Personal Account (for individuals who buy).
Premier account (for individuals who buy and sell).
Business account (for companies that sell on the Internet).

In all cases, users must fill out a registration form with email, password, name, surname, postal address, telephone number and type of card. If everything proceeds with complete normality, you will be in a position to have ownership of one of these accounts.

On the other hand, it is necessary to emphasize the advantages in the use of this payment method. Among which the following stand out:

It is a free service, without commissions or fees.
They only need to enter their email address and a password to make payments.
They will not have to enter their card details for each purchase.

Almost all user profiles can be accessed since only one Internet connection must be provided. From personal computers or any other technological device. Furthermore, financial data is not shared with the seller and therefore operations become very secure in all phases of this process. On the other hand, they allow you several options to make payments: with a credit or debit card, with a bank account or even through the balance of this technological system.

Declare the money earned in the Treasury

This is one of the most relevant approaches made by a good part of users around the world. Because it has very specific characteristics that undoubtedly need to be taken into account from now on. Where you can assume that individuals themselves choose or not for this special payment method.

Well, the answer in principle is that you don't have to declare it. But with a little precision that you should know now. That is, unless there is more than 50.000 euros in it and the Treasury forces the interpretation of the rule. This in practice means that the vast majority of users are exempt from this declaration.

This is because the recent Law 7/2012 established an obligation to provide information on assets and rights located abroad. But this obligation extends to deposits in banks or credit institutions abroad. In addition, RD 1558/2012 limits the obligation to declare to accounts or deposits in banks or credit institutions abroad that exceed 50.000,00 euros.
It is true that there is some interpretation of the rule that could require the declaration of PAYPAL accounts in which there are more than € 50.000. But it is an interpretation that I consider very forced and that I hope the AEAT does not reach.

Declare operations

Unlike the previous situation, in this case it is necessary to declare this kind of movement. It serves as a general rule that the obligation to declare operations is determined by the operation itself taxed by a tax, either the sale of a good or the provision of a service and by the availability of money even in the payment account Paypal. Not for the perception of money in a bank account.
Obviously there are peculiarities and obligations of their own depending on the service and the person who performs it, but there are too many to be dealt with in a mere article.

Can the Treasury request the movements?

In this case, the answer is quite emphatic: no. Because the control capacity of the branches of foreign companies in Spain is limited, and in particular the supervision of the Payment Institutions of other EU countries corresponds to the authorities of their country of origin.
It follows that if this type of information is required, it may have to be done based on the cooperation mechanisms in tax matters in the EU. Something not too agile and that will change at the end of this year.

In this sense, it must be emphasized that the new Directive 2011/16 / EU establishes the obligation to automatically send information regarding income and assets corresponding to tax periods as of January 1, 2014. Where the obligation to declare will come determined by the realization of the taxable event corresponding to each tax and its accrual.
The obligation to declare will be determined by the realization of the taxable event corresponding to each tax and its accrual.


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  1.   Ruben said

    Hi there! First of all, thank you very much for this article. I have a question that I cannot resolve. There is an Internet business where courses are sold online, repeatedly. Payments are made by Paypal. In this way, until the amount of € 50.000 is reached, there would be no problem, right?
    On the other hand, and this is the question I have, is that when it comes to selling the courses, when receiving the money from the sale, that is considered a movement / transaction / operation / whatever you want to call it, right? And that, as I have read in the article, it does have to be declared. So the question I have is if it is declared automatically for the sale itself, or if I have to perform some task to declare them, so that I do not have problems with the Treasury in Spain. In case of having to do something, you can tell me if it is from X amount, and what should be done specifically? Regards, and thank you very much.