PayPal is taxing payments to India with an 18% tax, per recent changes imposed by the government of India.
The GST Tax is an 18% levy to be passed to the government for digital transactions, much like VAT in Europe, and sales tax in the US.
Indians are upset, naturally, but for one more reason: PayPal imposes the 18% tax to all transactions, including payments originating outside of India.
Then, it’s up to the recipient to arrange with the Indian tax authority the status of payments that were in fact foreign.
According to popular Indian blogger, Jitendra Vaswani, this approach will make Indian freelancers “bleed:”
“We will lose lot of money and our hard work will go in paying taxes. WTF. This issue is now more urgent than ever.
A potentially explosive situation created by paypal and it is impacting people in India who are inexpedient on Paypal for money transactions. I feel very pity for every internet marketers now and I am also dependent on paypal totally.”
There is a campaign on Change.org to address this issue with PayPal payments.
Does this mean they will stop spamming me every time I register a name
Indians are being “shafted” by Indian government led by Mr. Modi who became world famous for banning several large denomination bills without any grace period.
Indian freelancers should be complaining to Indian government instead of crying about Paypal which is just doing what India’s laws demand them to do.
Modi and Indian government are taking the 18% from you NOT Paypal!
V-man : Actually, no. GST should not be charged to payments made from outside of India, but PayPal won’t spend the extra time to separate those that are, and passes the ball onto the recipient of the funds. There is no VAT collected for payments made outside of the Euro zone.