Thanks for answers, could you please clarify the question below then?
I must note that payment processors like PayPal
DO REPORT according to CRS and FACTA:
>>>>>>
PayPal Reporting Rules
Note that they report:
- your name;
- your address;
- your country (or countries) of (deemed) tax residence;
- your Tax Identification Number(s) issued by your country or countries of tax residence, and, where applicable, your U.S. Tax Identification Number (U.S. TIN);
- your place and date of birth;
- your account number (or substitute account number, identifying your funds held);
- your account balance or value as at 31 December of any year during which the account is held;
Pay attention to last line. It is clear that PayPal as an EMI is reporting only the account balance and
not the turnover. So as long as you have 0$ at end of year or a little sum, the respective authority will see that sum is little and not bother. I believe this logic also applies to Revolut and other EMIs.
This is the CRS EU directive that PayPal is basing the exchange on:
EUR-Lex - 32014L0107 - EN - EUR-Lex
Scroll down to
SECTION I: GENERAL REPORTING REQUIREMENTS
Subject to paragraphs C through E, each Reporting Financial Institution must report to the competent authority of its Member State the following information with respect to each Reportable Account of such Reporting Financial Institution:
1. the name, address, Member State(s) of residence, TIN(s) and date and place of birth (in the case of an individual) of each Reportable Person that is an Account Holder of the account and, in the case of any Entity that is an Account Holder and that, after application of the due diligence procedures consistent with Sections V, VI and VII, is identified as having one or more Controlling Persons that is a Reportable Person, the name, address, Member State(s) and (if any) other jurisdiction(s) of residence and TIN(s) of the Entity and the name, address, Member State(s) of residence, TIN(s) and date and place of birth of each Reportable Person;
2. the account number (or functional equivalent in the absence of an account number);
3. the name and identifying number (if any) of the Reporting Financial Institution;
4.
the account balance or value (including, in the case of a Cash Value Insurance Contract or Annuity Contract, the Cash Value or surrender value) as of
the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year or period,
the closure of the account;
^^^
This is the big one. It says balance or value and they also notify if the account was closed.
So there is no use opening and closing accounts, they will still get reported.
5. in the case of any Custodial Account:
(a) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period; and
(b) the total gross proceeds from the sale or redemption of Financial Assets paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder;
^^^
Not totally sure which accounts this applies to? It says Custodial Accounts. The law says: "The term “Custodial Account” means an account (other than an Insurance Contract or Annuity Contract) which holds one or more Financial Assets for the benefit of another person.". So...maybe this would be stuff like Revolut? I'm not totally sure
. Anyone?
6. in the case of any Depository Account, the t
otal gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period; and
^^^
EMIs and Payment processors like PayPal do not fit the "depository account" definition, do they?
7. in the case of any account not described in subparagraph A(5) or (6), the
total gross amount paid or credited to the Account Holder with respect to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Financial Institution is the obligor or debtor, including the aggregate amount of any redemption payments made to the Account Holder during the calendar year or other appropriate reporting period.
So if you are not a custodial account, then this gets reported pretty much? So what is this gross amount? Is that the leftover balance at end of 31 of December?
Putting 2 and 2 together it seems that PayPal does NOT report annual turnover, but reports EVERYTHING else as requested by law. PayPal won't do anything incorrectly, so would it be safe to assume THIS INFO is exactly what other EMIs like PayPal would report? Think Paysera, N26, Revolut, etc... So...the strategy of emptying accounts before the end of year would still work?
