I been searching for answers but I cant find anything that helps clarify things at all for my question.
I am opening an internet travel agency business and have questions regarding tax issues . The situation will be as follows.
Using Paypal UK to take payments in USD
Money will get withdrawn to a UK bank account (held in UKP)
I will transfer money from the UK bank account to a bolivian bank account to pay the travel service suppliers in Bolivia (the bolivian side of things im clear enough on)
I am a British national but resident in Bolivia, the bank account is a personal bank account of mine in the UK
Prob not relevant but the server hosting the site will not be in the UK
So what im confused about is if I would need to pay tax on these sales in the UK? The services and the actual business is in Bolivia , but the payments are made via paypal UK and a UK bank. Fees are paid for transferring money over seas as per usual.
The reasons for this setup is simply because there is no online transaction processing services in Bolivia. If there is another way of setting this up that works better , such as an offshore account in another country (panama, hong kong etc) in usd and I can transfer funds online to bolivia from that I would be prepared to do that. I would need to be open to open the account online though which is not easy nowadays.
Thanks for any advice.
Replies (4)
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If you are trading as an unincorporated business it comes down to where you are resident for tax purposes.
Why are you using a UK bank account anyway? Why not just transfer the money from the Paypal account directly to your Bolivian account? This makes no difference to where you are resident for tax purposes, but may save you a lot of bank charges.
Don't completely agree
"If you are trading as an unincorporated business it comes down to where you are resident for tax purposes."
It also depends on where the trade is carried out, so non-residents are assessed on the UK profits of a trade carried on in the UK.