Hello Everyone,
I have a question regarding Paypal Adaptive Payments parallel and chained methods. In Paypal chained method, money is coming from sender, commission is given to primary receiver as per percentage and secondary receivers receive money as per their percentage. During this, sender (as example advertising company or google adsense) only know primary receiver and send form 1099 for taxes. During parallel method, same thing is happening but sender have knowledge of all the receivers. Advertising companies don’t allow payments through parallel workflow though. More information about these methods can be found on this link.
https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=developer/e_howto_api_APIntro
Now, my question is, On what income the primary receiver has to pay the income tax. Means, as sender is sending all the money to the one receiver in case of chained method, without knowing that its being devided into multiple parts to be deposited to multiple parties’ accounts. Will it be considered as money is going to primary user and he is forwarding secondary users their part. What if secondary users are international people without paying tax in india. In case of parallel, I think everything is transparent, so primary receiver only has to pay taxes on the money he is receiving. Its very confusing situations. Any help regarding this is much appreciated.
Thank you.
Kind Regards.
CAclubindia
