Paypal charging fees on top of US sales tax

[drewjza70]

So I just sold an item to a US buyer, in the PayPal receipt I see this:

Item price $256.00

Shipping $24.00

Tax $24.86

Total $304.86

Fee -$11.27

What I noticed is Paypal are charging their 3.6% (+$0.30) international fee on the full amount INCLUDING on the portion collected by ebay for US taxes. I know this is only $0.89 for this item, but if they are doing this to every item sold to the US that's a lot of extra charges. Has anyone made enquires into whether this is a breach of any consumer laws/financial services laws etc in Australia? It seems extremely dodged that they can charge us a fee for a tax that isn't even our responsibilty. 

[brerrabbit585]

They've been doing it in the US for years. I know it's a different country but the fact is that they can charge on the total amount and it's not their problem what the total is made up of. They're charging for the convenience of you receiving payment and I'd imagine if it was a bank they'd do the same thing.

[south.coffee]

Exactly the same thing here, it's just that the dispursement includes our 10% GST in the total price, not seperate.  Possibly due to different state taxes across the 52 states which the local buyer will be made aware of at Checkout.

[drewjza70]

But that's the point, this is a different country and they've only been doing it for the last few months. I have no problem with them charging their fee on the portion of payment I receive, but not on the US sales tax. A bank would almost certainly be in strife if they charged fees for the collection of taxation here, just like businesses can't charge for collecting GST. 

Also as far as I'm aware when a sale is made from outside Australia to an Australian resident, the PayPal fee is not charged on the GST portion?

[brerrabbit585]

A bank may not be allowed to charge for collection of Australian taxes** but it could well be different if they're collecting taxes for a foreign country. Why should an Aussie bank collect another country's tax for free?

**Are you trying to say that whenever I use my credit card to buy something at the supermarket that has GST as a component of the total price, the bank isn't allowed to charge the supermarket a fee on the GST portion of the payment? I'll bet they do charge their percentage on the total payments made, regardless how much of it the shop has to forward to the govt in GST. How would the banks know how much of the payment was for GST? The supermarket wouldn't easily be able to provide proof to the banks of how much GST was involved.