PayPal is a topic that is not yet well-known, so it’s a common topic of bloggers, freelancers, media, entrepreneurs and all the others who are following and impatiently waiting for news and changes. The most common topics and questions are: is it enabled in Serbia, how to transfer money to Visa card, how to pay, how to raise money, what is the commission, whether there is a tax.
PayPal is an American company whose main business is the issuance of electronic money and provide services that are associated with payment. It was founded in 1998. with headquarters in California, and in Europe it is headquartered in Luxembourg.
It is one of the most well-known system for payments and billing over the Internet, which has over 203 million open accounts worldwide, and is available in 202 countries and supports 25 different currencies. PayPal users are called residents, and they can be both individuals and legal entities.
In Serbia, it started operating in April 2013, but after two years, the billing was made possible, i.e. that residents can receive money from abroad, or that in foreign currency they charge their goods and services.
Previously, residents were only allowed to pay in foreign currency – they bought goods and services from abroad. But, mutual transactions through PayPal among residents in Serbia are not yet enabled.
Hereinafter we will explain how PayPal in our country can be used legally and when not.
Our Law interprets PayPal as a foreign e-money institution. According to the official statement of the National Bank of Serbia, in Serbia payment transactions with foreign countries via foreign electronic money institutions are permitted. This means that in Serbia, individuals and legal entities can use PayPal for payment, purchase and billing to foreign completely legal, but there are some limitations.
Domestic physical and legal persons are not permitted to perform payment transactions through PayPal in Serbia because it does not support the dinar as a currency.
In other words, receiving money from customers from abroad and paying suppliers in foreign is legal, and receiving money from buyers from Serbia and paying to suppliers in Serbia through PayPal is not legal.
PayPal will be able to use it to perform payment transactions only when it is registered in Serbia, and from the NBS receives a license and permit for electronic money issuing in country.
In order to use it, it is necessary to open a PayPal user account.
The first step is to open a PayPal account, directly from their site. The opening for individuals is through a personal account, and for legal entities through a business account.
Data to be entered is an email address, data about a physical or legal entity and a currency. Then, you need to have a Visa card that can be used for both offline and online payments. The card and account must be verified, where you PayPal initially tasked with 1.5 euros, which is refunded shortly.
When you make a payment from a PayPal account, money can also be withdrawn from a linked foreign currency account. Before the payment is made, make sure that the course converts into euros. The received money does not have to be immediately withdrawn from the account. If you want to raise it, you need to withdraw from the PayPal account and transfer it to the linked and verified Visa card. Within a maximum of seven days the money will be transferred to the Visa card.
Legal entities – the justification of payment also takes place simply, if you work properly and you respect the law. You justify the amount you paid to the foreign currency account with a PayPal account payment report. Consult your financial firm from Serbia for more information.
The commission for PayPal account services is not small and amounts to about 3.5% of the transaction. In addition, for each withdrawal of money and transfer to Visa, a fixed cost of $ 4 is removed.
When opening an account, it is not necessary to leave additional information about one or more bank accounts or credit cards. Therefore, it is one of the safest ways to conduct online transactions.
The PayPal protection system has been perfected and set to a high level, so that by protecting customers and sellers, it is possible for customers to file a complaint in the short term, and to protect vendors from ungrounded complaints.
Although PayPal is an intermediary in cash flow for both legal entities and individuals, taxation is different.
Legal entities do not pay VAT and profit tax when the transaction is executed. The resulting changes only affect the sum of your monthly and final business, and taxes will be paid depending on this situation.
If individuals are engaged with an employer from abroad, the legal obligation is to create a model of employment contracts, then to calculate taxes and contributions, surrender the tax return and pay to the state. The total tax to be paid is over 50% of the generated income.
The main advantages and disadvantages of this service can be summarized in several theses.
The disadvantages are:
If you like this article, share it with someone who can be useful.
We deal with providing professional accounting services for legal entities. If you need the services of our accounting firm from Belgrade, please feel free to contact us, so that we can meet you in the shortest time possible.