I set up a PayPal account for Polish company.
As you probably know PayPal is charging 2.9 % as a fee + 0.80 fixed fee. The main problem is I can only receive funds in my local currency.
Say if I did a job and get paid 100 EUR, PayPal will exchange this with their own exchange rates (which is very low by the way) and then send the money in PLN (Polish Zlote - my local currency-)
Problem starts here for accounting;
- How can I show the PayPal fee?
- I have to create invoice for 100 EUR but I receive completely different currency in my bank account.
Let’s say 1 EUR is 4.25 if I’ll exchange it in an exchange office
PayPal’s rate is 4.14
I got paid 100 EUR (B2B) and after PayPal fees, I’ll receive 96.30 EUR in my PayPal account. When I want to withdraw this money, I have to exchange it to PLN so 96.30 EUR * 4.14 so 398.68 PLN will be in my bank account.
This is the confusing part. How can I show the PayPal fee and the received amount to my bank account. How can I possibly show the right amounts so I’ll not pay wrong tax?