Sending and Receiving Money Through PayPal? You Could Be in for a Big Surprise
Are you sending or receiving money through PayPal for your business accounts? If so, you’re likely on the Canada Revenue Agency’s radar.
In late 2017, the Canada Revenue Agency (CRA) ordered PayPal to disclose information about PayPal Business account holders for any payments sent or received through PayPal between January 1, 2014 and November 21, 2017.
PayPal was required to disclose:
- The full name of every individual or corporation holding a business account that has a Canadian address.
- The date of birth of each individual holding a business account.
- The business name, if applicable.
- The telephone number(s) of the corporation or individual holding the business account, if available.
- The full address(es) of the corporation or individual holding the business account.
- The email address of the corporation or individual holding the business account.
- The Social Insurance Number and/or Business Number of the corporation or individual holding the Business Account, if available.
- The total number and value of received transactions for each calendar year between January 1, 2014 and November 21, 2017.
- The total number and value of sent transactions for each calendar year between January 1, 2014 and November 21, 2017.
Even if a PayPal account is now closed, if it was used during that time period of January 1, 2014 to November 1, 2017, PayPal was still required to submit the information.
This order was a “one-time disclosure” according to PayPal, but the precedent has been set. It could happen again.
The CRA can use the information they gathered to:
- Find businesses who are late filing their taxes.
- Uncover businesses who haven’t been disclosing all income.
- Find unreported GST/HST income.
All business transactions carried out in Canada, by Canadian residents or non-residents, are fully taxable and have to be reported to the CRA. GST and/or HST may have to be charged if annual sales reach $30,000 or more.
The order was reportedly a measure by the CRA to tackle the “underground economy.” The information gained could be used to track outstanding tax debts and crack down on “under-the-table” transactions.
If your business is sending or receiving money through PayPal, be aware of the following:
- Make sure that your transactions are aboveboard. All income should be reported to the CRA.
- Be sure you are charging the appropriate GST/HST.
- Make sure your tax filings are kept up to date. It’s not illegal to be behind on paying your taxes, but it is against the law to not file your taxes at all, to not disclose all of your income, or to fraudulently disclose income.
At Fuller Landau Debt Solutions, we can help you with your business taxes whether you’re sending and receiving money through PayPal, or in another way. We’ll work with you to find a solution to your tax problems.
Contact us today for a free consultation. Call 416-927-7200 or visit www.fullersolutions.ca.