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I have been using PayPal for quite some time for my business (US based), and have a pretty good understanding of the tax reporting and how it works. However, I am not able to find any resources for how the income tax reporting works in other countries through PayPal.
I have close friend who is from Cebu City, Philippines, and doesn't have the best english ability - so I am doing some homework for her. She has recently started a business, and her main payment source is PayPal. Through a good amount of research, I can't find any content that describes how PayPal works in the Philippines in terms of recording, and reporting income and revenue data to the tax agencies.
My question here is: does PayPal report income in the Philippines (through both a personal, and business PayPal) the same way they do in the USA? In the USA you must reach both $20,000 in revenue, as well as a set # of payments received in the "products and services" category.
Or, does PayPal not report anything in the Philippines, and it will 100% be her own responsibility to do all of the reporting and recording at the end of year, and send it to the government herself?
1099K is a US centric law. Doesn't seem like the Philippines has any specific tax reporting requirements like it does in the US:
"13.12 Taxes. It is your responsibility to determine what, if any, taxes apply to the payments you make or receive, and it is your responsibility to collect, report and remit the correct tax to the appropriate tax authority. PayPal is not responsible for determining whether taxes apply to your transaction, or for collecting, reporting or remitting any taxes arising from any transaction.
Please be advised that you may be subject to withholding taxes or other tax liabilities with respect to importing services from a foreign entity. In addition, you may be subject to VAT, sales tax, income tax, or other tax liabilities as a seller of goods or services. It is your responsibility to check with your local tax advisor to determine which taxes apply to you, and it is your responsibility to pay such taxes to the appropriate tax authority. All Fees related to the PayPal Services are made free and clear of, and without any deduction or withholding for and on account of, any taxes, duties or other deductions. Any such deduction or withholding, if required by the laws of any country/region are your sole responsibility."
Friend has to contact tax professional in PH as to what is applicable for her business.