Following the conviction of a professional holding and using a Paypal account as part of his activity which had given rise to numerous questions from users of virtual accounts, the Tax Administration made changes to article 1649 A of the General Tax Code concerning the obligation to declare an account held abroad .
No obligation to declare a Paypal type account held abroad
The Tax Administration provided details concerning accounts opened abroad for the purpose of making online payments or collections, with regard to Paypal as well as the other electronic payment methods of this type.
Thus, it is specified that the reporting obligation provided for in article 1649 A of the CGI does not apply to accounts held abroad in financial institutions when the following cumulative conditions are met:
– the purpose of the account is to make online purchase payments or collections relating to the sale of goods;
– the opening of the account supposes the holding of another account opened in France and to which it is backed up;
– the sum of the annual collections credited to this account and relating to sales made by its holder does not exceed € 10,000. This threshold is assessed, where applicable, by adding together all the collections made on all the accounts held by the same holder and whose purpose is to make online purchase payments or collections relating to sales of goods.
Concretely, the fact of having a Paypal type account which, for Europe, is domiciled in Luxembourg, does not entail the obligation to declare this account if it is linked to a bank account located in France and if it is is only used to receive / send money for purchases and sales on the internet up to the limit of 10,000 euros per year.
The text is clear, individuals and companies are not subject to an obligation to declare an account held abroad if they own and use a virtual payment account such as Paypal , subject to not collecting more than 10,000 euros per year on these virtual accounts.