Providing a Tax Invoice for Paypal Payments

[toolman-online]

I dont use Paypal for listings of a high dollar value due to the high fees compared to my banks credit card merchant rate.

My discussion point is this and relates to providing a tax invoice to customers.

If I sell an item for $1100 ($1000 plus $100 GST) and the customer pay via Paypal I am likely to receive $1071.05 This amount has a GST component of $97.37

So when I issue a TAX invoice for $1100 on paper I have collected $100 GST but in reality it is only $1097.37 that I have been paid with a GST component of $97.37

Paypal do not issue me with a tax invoice for their fees so where is the $2.63 shortfall going ?

When I do my BAS I say that I collected $97.37

The customer is expecting a tax invoice that says he or she paid $100 GST.

Therefore when the buyer claims $100 as a GST credit meaning the Australian Government $2.63 out of pocket.

Do Paypal submit a BAS and pay GST and taxes ?

They should !

Does anyone want to comment ? 

[digital*ghost]

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@tashi911 wrote:

Are those little chinese shops who are charginf me 10% gst really paying this back to the aust govt or is it just free money for them

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They don't even see the money. If you check your Paypal receipt, you'll find that the money was split into two payments - the purchase price (and any postage) going to the seller, and the GST going to an account owned by eBay, who will then pass it on to the government. 

[ozstockman]

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@toolman-online wrote:

I dont use Paypal for listings of a high dollar value due to the high fees compared to my banks credit card merchant rate.

My discussion point is this and relates to providing a tax invoice to customers.

If I sell an item for $1100 ($1000 plus $100 GST) and the customer pay via Paypal I am likely to receive $1071.05 This amount has a GST component of $97.37

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Talk to your accountant because you are doing it wrong. Your GST on $1000 product is $100 and that what you tell ATO as collected GST. Your fee to paypal is an expense. If paypal fee includes GST you put GST on this fee as paid for BAS.

So for this particular product you have collected $100 in GST and paid $2.5 for GST in a paypal fee. It means you owe ATO $97.50($100-$2.5)

[ozstockman]

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@tashi911 wrote:

Are those little chinese shops who are charginf me 10% gst really paying this back to the aust govt or is it just free money for them

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They(chinese shops) are not charging you GST at all. EBay does acting as a tax agent for ATO to collect GST from these sales.

The same happens with purchases through Amazon, Alibaba and Aliexpress.

However if some small online  shop outside of Australia does it I highly doubt they are doing it legally. 

[davewil1964]

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@ozstockman wrote:

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@toolman-online wrote:

I dont use Paypal for listings of a high dollar value due to the high fees compared to my banks credit card merchant rate.

My discussion point is this and relates to providing a tax invoice to customers.

If I sell an item for $1100 ($1000 plus $100 GST) and the customer pay via Paypal I am likely to receive $1071.05 This amount has a GST component of $97.37

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Talk to your accountant because you are doing it wrong. Your GST on $1000 product is $100 and that what you tell ATO as collected GST. Your fee to paypal is an expense. If paypal fee includes GST you put GST on this fee as paid for BAS.

So for this particular product you have collected $100 in GST and paid $2.5 for GST in a paypal fee. It means you owe ATO $97.50($100-$2.5)

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I suspect toolman has sorted it out in the last THREE years.