Taxes and PayPal Revenue
Sales through PayPal are processed in seconds. It's easy to forget that there is still the tax office that wants to be involved in every commercial process and demands taxes. If you started out as a private seller, check regularly whether you have exceeded the limits of commercial activity. You risk high demands for additional payments from the tax authorities.
If you sell through an auction platform, you have to make sure that you are doing business above a certain turnover and then have to pay taxes. Even if you have sales over one account process with PayPal, you must under no circumstances assume that the tax authorities will not notice this.
Payments via PayPal are no secret
- Assume that tax offices are sent by way of a collective request for information On-line-Trading platforms get data from all providers in hand. If you are active there, the tax authorities will find out about your activities.
- Remember that the Treasury for up to five years Income tax and value added tax can demand from you. If criminal tax proceedings are also initiated, the additional tax claim is extended to up to ten years.
- In a ruling, the Federal Fiscal Court (ruling v. April 26, 2012, Az. V R 2/11) clarified that a couple with a turnover of € 100,000 with postage stamps, Toys or other used items that are commercially active and therefore subject to sales tax subject. The couple was sued for the back payment of € 11,000. The Berlin Regional Court had judged 39 sales in five months to be commercial. The Frankfurt Higher Regional Court demanded at least 50 cases, and 40 cell phones sold at the Zweibrücken Higher Regional Court were sufficient.
Taxes apply from certain sales limits
- At most, you are not liable for sales tax if your sales are below € 17,500 per year. Then you are considered a small business owner and can be exempt from VAT. Your sales via PayPal and other accounts will of course be added together.
- If your income is over € 24,500, you are also subject to trade tax.
- Income over € 50,000 justifies your accounting obligation.
- Note that the tax authorities may classify your sales as profit if no further details are given. You should therefore definitely seek tax advice and, if necessary, consider filing a voluntary disclosure.
As a rule, almost every self-employed German entrepreneur is subject to sales tax ...
This is how you assess your business
- Remember, you can't excuse yourself from selling only private items that you yourself have previously collected as a collector and perhaps without the intention of reselling them over many years or only through PayPal settle up.
- As soon as you carry out the sales with a certain regularity and intensity, which also require a certain organizational effort, you are commercially active.
- In addition to being liable for sales tax, you must also subject your income to income tax. Even if you work as an employee, you are required to file an income tax return Tax office to submit. Your income is income from self-employed commercial activity.
- Since you are commercially active, you must also report your activity to the trade office of your city administration.
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