Paypal ordered by CRA to disclose transaction info

[Red Squirrel]

I don't recall if my account is business or not but pretty sure it is as if I recall it was required for the API to work, but I removed all the donate buttons and stuff off my sites at least for now till more gets known about their intention with this court order. The amount of money I was making through that is not worth the hassle of having to manually track and report that, or the risk of making my tax return smaller.

I wonder if I should get rid of my ads too, I could see them go after Google Adsense at some point.

 

[sdifox]

I don't recall if my account is business or not but pretty sure it is as if I recall it was required for the API to work, but I removed all the donate buttons and stuff off my sites at least for now till more gets known about their intention with this court order. The amount of money I was making through that is not worth the hassle of having to manually track and report that, or the risk of making my tax return smaller.

I wonder if I should get rid of my ads too, I could see them go after Google Adsense at some point.

I find it hard to believe it being true and not making it to news by now.

 

[Red Squirrel]

I find it hard to believe it being true and not making it to news by now.

It is. It's on Paypal's site: https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq3755

I do find it odd that it's not making news though...

I feel bad for anyone trying to run their own small web based business selling stuff, they are going to get royally screwed by this. But this is typical of the government, they don't like when people make money through unofficial channels, they want people to work for the man.

 

[brianmanahan]

I'm not your buddy, guy.

Spoiler

(you did it wrong. Should be "I'm not your buddy, friend")

really? i just looked it up on youtube

 

[sdifox]

It is. It's on Paypal's site: https://www.paypal.com/ca/selfhelp/article/cra-information-request-faq3755

I do find it odd that it's not making news though...

I feel bad for anyone trying to run their own small web based business selling stuff, they are going to get royally screwed by this. But this is typical of the government, they don't like when people make money through unofficial channels, they want people to work for the man.

Why would they be screwed? They are running a business, they need to report that income. As long as they reported the business income properly, they are fine.

<--- self employed, so I am owner of a small business.

 

[Red Squirrel]

The issue is some people might just be doing it on the side and it's not really a business. They might bring in like a couple hundred bucks. Like some kind of hobby where they make stuff and sell it. The actual revenue might be higher but their costs of operating might be high enough that they're only making a small amount. Now if the government wants to tax it they'll end up losing money and have to quit completely.

Meanwhile you have megacorps using every loophole in the book to avoid paying taxes and it's all legal. They need to go after those guys, and make their tactics illegal but they rather go after the easier targets which are individuals.

 

[Victorian Gray]

Michael Geist article confirms:

http://www.michaelgeist.ca/2017/11/...-obtains-broad-court-order-years-paypal-data/

 

[sdifox]

The issue is some people might just be doing it on the side and it's not really a business. They might bring in like a couple hundred bucks. Like some kind of hobby where they make stuff and sell it. The actual revenue might be higher but their costs of operating might be high enough that they're only making a small amount. Now if the government wants to tax it they'll end up losing money and have to quit completely.

Meanwhile you have megacorps using every loophole in the book to avoid paying taxes and it's all legal. They need to go after those guys, and make their tactics illegal but they rather go after the easier targets which are individuals.

So? You still have to pay tax on that two hundred.

 

[Red Squirrel]

So? You still have to pay tax on that two hundred.

Which is ridiculous. Can't someone at very least get to keep that small paltry amount when they are paying taxes on everything else such as their job? It's just ridiculous that they are after every little penny and in often cases double or even triple tax us.

How about they actually go after the megacorps that are evading billions of dollars in taxes.

 

[sdifox]

Which is ridiculous. Can't someone at very least get to keep that small paltry amount when they are paying taxes on everything else such as their job? It's just ridiculous that they are after every little penny and in often cases double or even triple tax us.

Income is income. You understand there are businesses that sell a lot on ebay right?

 

[Red Squirrel]

Income is income.

But it's ridiculous to tax it multiple times. They would already be paying taxes on that income at tax time. Paypal transactions are basically going to be taxed twice.

 

[sdifox]

But it's ridiculous to tax it multiple times. They would already be paying taxes on that income at tax time. Paypal transactions are basically going to be taxed twice.

You are misunderstanding. This is about sellers.

 

[BarkingGhostar]

Q: If I buy something with my net income and then sell it via a business PP account to recover some of that net income I will have to be double-taxed on the original income?

 

[deustroop]

I'm not an expert in Canada's tax compliance, but there is a reason this doesn't exist in the US... Because it's ultimately fucking stupid. There are way bigger dogs to chase than random eBayers that sell an occasional item.

Nugatory. Many small businessmen make a tidy sum selling on Ebay and should be reporting the income.

 

[deustroop]

Q: If I buy something with my net income and then sell it via a business PP account to recover some of that net income I will have to be double-taxed on the original income?

Income less expenses is taxable.Paying for something (later sold) is the expense which is subtracted from the money received from a buyer. Any profit the seller makes is taxable income and taxed only once. If the profit is $ 200 and the seller pays $ 20 tax, the $180 is not taxed. It can be used to profit some more and only the further profit is taxed.

 

[Red Squirrel]

Q: If I buy something with my net income and then sell it via a business PP account to recover some of that net income I will have to be double-taxed on the original income?

Basically. It's the same with cars. If you sell a car you have to pay tax on it and then the buyer also has to pay sales tax, and if he sells it later on, rinse and repeat. It's completely retarded. The same money is taxed more than once.

So all these people making small electronics or other stuff as a hobby and selling it on ebay pretty much have to stop doing it, as the taxes will probably be more than what they even make from it when you consider their costs. I doubt they have a way to track or care about your costs, they just care about how much money was involved in the transaction.

Now if you are running a "real" business where you get forms in the mail and stuff, and sell through normal channels such as a local store front then it's a bit different as you can write off stuff.

 

[GeekDrew]

Perhaps you all should, oh, I don't know, look into what the law is, and then comply with it, rather than rampantly speculating about how you're being excessively taxed... solely because a report was demanded. o_o

 

[Red Squirrel]

Perhaps you all should, oh, I don't know, look into what the law is, and then comply with it, rather than rampantly speculating about how you're being excessively taxed... solely because a report was demanded. o_o

Until now there was no law saying anything about Paypal or any similar transactions. This is new. Heck, they just got court ordered, we still don't really know what their intent is, it's just speculation at this point that they want to start taxing it. I go by whatever my T4 form says, bring that to my tax person and get it done. If they want to tax other stuff like Paypal then it's up to them to make that information be part of the form.

 

[GeekDrew]

Until now there was no law saying anything about Paypal or any similar transactions. This is new. Heck, they just got court ordered, we still don't really know what their intent is, it's just speculation at this point that they want to start taxing it. I go by whatever my T4 form says, bring that to my tax person and get it done. If they want to tax other stuff like Paypal then it's up to them to make that information be part of the form.

What do you mean by "until now there was no law"? I've read everything I can find on this, and thus far, there's no evidence that anything at all has changed or will change, with regard to taxation.

 

[Red Squirrel]

What do you mean by "until now there was no law"? I've read everything I can find on this, and thus far, there's no evidence that anything at all has changed or will change, with regard to taxation.

Right now nothing has changed, it's all speculation, but there must be a reason they want all that info. Either to enforce an obscure law that most people don't know about, or to make a new one. But as far as I'm aware, there's no law saying you have to do anything special for Paypal selling/purchases etc.

 

[GeekDrew]

Right now nothing has changed, it's all speculation, but there must be a reason they want all that info. Either to enforce an obscure law that most people don't know about, or to make a new one. But as far as I'm aware, there's no law saying you have to do anything special for Paypal selling/purchases etc.

You haven't considered that they're enforcing laws that businesses do know about and may be using Paypal to evade? Nothing anywhere (that I've seen, thus far) has led me to believe that there *is* anything special for Paypal compared to other organizations that process financial transactions - in the past, present, or future. Paypal making a big deal out of this doesn't necessarily mean that they're being singled out - it may mean something as simple as "we got away with not reporting it for years, and they finally called us on it", or "our platform is likely being exploited by businesses in order to avoid financial reporting rules elsewhere".

<edit> There was a similar round of crap like this in the US years ago, which ultimately caused Paypal to be required to collect more information about both the people and businesses that are using their services, so that the information can be reported. Just as had already been the case with nearly every other financial institution.

 

[sdifox]

Basically. It's the same with cars. If you sell a car you have to pay tax on it and then the buyer also has to pay sales tax, and if he sells it later on, rinse and repeat. It's completely retarded. The same money is taxed more than once.

So all these people making small electronics or other stuff as a hobby and selling it on ebay pretty much have to stop doing it, as the taxes will probably be more than what they even make from it when you consider their costs. I doubt they have a way to track or care about your costs, they just care about how much money was involved in the transaction.

Now if you are running a "real" business where you get forms in the mail and stuff, and sell through normal channels such as a local store front then it's a bit different as you can write off stuff.

Huh? You only pay tax if there is capital gain.

 

[deustroop]

Right now nothing has changed, it's all speculation, but there must be a reason they want all that info. Either to enforce an obscure law that most people don't know about, or to make a new one. But as far as I'm aware, there's no law saying you have to do anything special for Paypal selling/purchases etc.

You obviously owe back taxes . Call CRA and settle up. This paypal records thing does not create a new obligation on you. When I receive interest income from a financial account, the institution sends me a record at tax time to report the income and sends a copy to CRA. Just think of PP as a bank.
If you have avoided reporting just a few hundred, don't sweat it, but it does seem you omitted reporting more than that. That's tough but the obligation on a citizen to report income has not changed.
It's pretty clear to me no one was reporting cross border income, from ebay etc. and CRA is moving to ensure tax compliance. That is absolutely fair since I report my income.

 

[nakedfrog]

Basically. It's the same with cars. If you sell a car you have to pay tax on it and then the buyer also has to pay sales tax, and if he sells it later on, rinse and repeat. It's completely retarded. The same money is taxed more than once.

Only if you make a profit on the car, and how often does that happen?

 

[sdifox]

Until now there was no law saying anything about Paypal or any similar transactions. This is new. Heck, they just got court ordered, we still don't really know what their intent is, it's just speculation at this point that they want to start taxing it. I go by whatever my T4 form says, bring that to my tax person and get it done. If they want to tax other stuff like Paypal then it's up to them to make that information be part of the form.

No, that is not how it works.