Court of Pau ruled that a Paypal account, headquartered in Luxembourg, is a foreign account and it must declare under penalty. But things are not so simple … Explanations.
Since morning, a panic invaded all PayPal account holders. The press (and including Challenges.fr) relays the information that holders have a PayPal account must declare to IRS under penalty of a fine of 1,500 euros. The origin of this craze, a post on the blog of Ms. Catherine Taurand, a lawyer in tax law, which incorporates a decision of the Administrative Court of Pau.
The judges ruled that “an account opened with the company Paypal Europe, which is headquartered in Luxembourg, is a foreign account subject to the reporting obligation, since it allows the holder to have access to payment services and Internet make purchases online using funds available through that account, “says the lawyerFine incurred:. 1,500 euros per account undeclared (Article 1734 IV of the General Tax Code). And we have 10 or € 5,000 in his account. For Ms. Catherine Taurande, it is a “very extensive section 344 A of Annex III to the General Tax Code” interpretation.
A professional and not an individual case
The accused did not appeal the decision of the Court of Pau. It therefore became final. One might imagine that it applies to each owner a PayPal account (online payment service that allows you to pay for purchases, receive payments or to send and receive money). Especially it is, obviously the single court in France on the topic.
There are actually more scared than hurt. Because the case did not involve an average person who used his PayPal account to buy or sell here and there a pair of shoes or a sofa. It was a professional (in this case an antique). His PayPal account was controlled under a general tax audit activity. Two things were alleged him to have an account in the United States undeclared, which is illegal, and their PayPal account.“The court is not very clear, laments Ms. Catherine Taurand. Though the case could be contentious, difficult to say what will happen in other cases, people with only a few euros on their behalf. “
Bercy reassures
Paypal, he clears himself of any responsibility as indicated in letters in the conditions of use that is the responsibility Users of “whether and which taxes apply to payments you make or receive.”
However, the General Directorate of Public Finance wants to be reassuring. It states that “the decision of the Court of Pau is a special someone who had not complied with its reporting obligations circumstances. The French who use payment solution dematerialized (Paypal or otherwise) to make purchases or common transactions of life have no reason to be worried by the tax authorities and to claims for fines. “
In other words, if you use a payment solution dematerialized only for shopping, the absence of a declaration will not be punished. If you use a payment solution for cloud collect revenue (related to sales, for example) or if it has a positive balance, you must declare it to the tax authorities. But again, it’s all about interpretation. If only small sales daily, no need to declare their PayPal account. However, if the Paypal account is linked to your bank account (even a bank account in France) and that sales may be related to a business, in this case, it must be declared to the tax authorities. And, by filling out the form CERFA 11916.
Last, bank accounts abroad have them all be reported to the IRS. This is what was alleged, for example, the former budget minister Jerome Cahuzac. (The ruling of the Court of Pau)