FNB/PayPal and tax
I have a PayPal account which I've linked to an FNB savings account. I've sold some accounts on an online game for PayPal cash and have transferred the proceeds to my FNB savings account. The amounts are small and range from R200 to R1000 totalling around R5000. This is over the last 4-5 months. When transferring the cash from PayPal to FNB I say it is a "gift".
What are the tax implications for this? Do I need to worry about SARS claiming cash from me in the future?
Well it is still income is it not?
You've sold something so I'm pretty sure SARS will want their share.
By law you have to declare any additional income streams.
Ok, so if I don't declare it, what happens? Will they do the calcs and just ask me to pay? I don't mind paying, I just want to go through the proper procedure without any hiccups.
I've never done my own tax before, since the company I work for does everything. All I've ever had to do was just go onto e-filing and click submit.
You'll probably have to specify it on FNB as something other as "Gift" to begin with. Perhaps if you specify it as income, it will appear on your eFiling automatically? Otherwise you'll just have to specify it on eFiling under a specific income code.
If you leave it as "gift", I'm not sure how that is taxed.
Is it a business?Originally Posted by KalMaverick
As the above stated. It is income,however small it is.You have not registered it as a business and will/should be taxed on the sliding scale,luckily this amount is under the threshold depending on what you earn may push you up into a new tax bracket for a month.
In practice, Only if there is a difference on your eFILING would I disclose it. I am sure they will pick it up and thus will have to disclose it. Remember if its left as a gift we have a special tax for that called "donations tax"
Can easily pull that but SARS will then attempt to collect from the Donor first,if the Donor declines they will move accross to the person who received the so called donation ie the Donee.
So best be sure you will inevitably pay tax in some form for this income.
Mr Churchill will always be correct 'There are only two things in life that are certain...Death & Taxes'
Private message me if you have any further queries.
O and to answer your very quick question. Declare it. Dont just wait for SARS to ask for the payment which they will do in the end. You have 7 months from the time of efiling deadline to rectify differences and discrepancies in your disclosed income and tax.
Anything over that time frame gets lovely penalties. If my memory serves(which it can fail sometimes,havnt checked rates in a while) 10% penalty on the difference of amount owing.
Thanks for the advice. I'll check for any issues on efiling. I think the amount that was payed in during the last tax year was quite small, around R1000 up to 29/02/2012.
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