I'm not a US citizen nor located in the US. I provide digital services to US citizens and others around the world via the internet.
I'm planning to open a business account and grow my client base. I'm not sure how the taxes are handled in my situation.
Do I need to report them? Does PP do it automatically? I don't have a tax ID number nor work permit US or anything. Because my country does not enforce taxation.
US sellers collect state sales tax if the buyer resides in the same state as the seller and remit them to the state at the end of the year or monthly or quarterly.
We also report income derived from internet sales to US goverment each year.
But if you are not US citizen and not residing in USA,you are not obliged to collect sales tax or any tax from US buyers.
you must be aware there is no seller protection for anyone selling digital or virtual goods as you do not have tracking to show item has been delivered when buyer files item not received.
You can always look into PayPal Digital goods payments processing services in your region. It does provide seller protection albeit limited for Item Not Received, if you have the proper download logs. Consult user agreement or a PP specialist for that service for more info.
