Payoneer / firstpaychoice and Automatic data exchange from OECD

[Fred]

Payoneer is using some kind of pooled accounts that are not reportable under CRS for now.

However I'm 100% sure that if a Tax Authority contacts them to release information about a person - they will do.

Payoneer will become publicly traded company - they need to comply with the law
https://www.payoneer.com/about/media-center/payoneer-to-go-public/
I even can imagine that they will tighten there regulations as there past growth was due to the fact that they targeted freelancers in high risk countries only and the fees refelcted it together with unusual high ATM withdraw limits of 5.000$/day.

 

[evildoer93]

Payoneer is indeed the only EMI that is issuing and shipping their debit cards to users in high-risk countries. Until very recently they didn't even ask for proof of address before issuing the card (now they do since they moved to Ireland). Other EMIs like Wise are limited to clients in the EU/EEA.

Serbian freelancers are concerned that Payoneer will send information to tax authorities of all their users registered in Serbia (tens of thousands), which I think is impossible without Payoneer reporting through CRS. If they start reporting through CRS, according to the Serbian tax code, tax authorities can demand taxes and social contributions from people for the past 5 years + interest, which will be a huge blow to freelancers.

Payoneer knows their clients are using their cards for evading taxes, and if they start reporting through CRS they will lose many of them.

 

[Fred]

Payoneer knows their clients are using their cards for evading taxes, and if they start reporting through CRS they will lose many of them.

Could be the case that this was some kind of guerilla marketing to have the fastest possible growth and once they are big enough they will get rid of all this customers - same did Skrill in the past already step by step.

Same did AdvCash in the past already - I mean they were literally processing all the shady s**t and ponzi scheme money all over the internet for a half decade and now they are acting with there compliance like a real bank.

If things are too good to be true - they will change sooner then later - especially in the year 2021 and ongoing.

 

[newNomad]

It's 2021, and I am curious if Payoneer is reporting its user transactions via CRS?

In Serbia, there is a massive crackdown by the local tax authorities on freelancers who are not reporting their taxes (tens of thousands of them, they are now organizing protests in front of the parliament). So far, they only managed to catch those who withdrew funds from Payoneer to their bank account. Still, many people consider Payoneer MasterCard as a "tax haven," withdraw funds on ATMs, and believe Payoneer isn't going to rat them out the tax authorities. So far they didn't.

Serbia signed CRS in 2019. Do these people live with a false sense of security? Are things going to change?

Are you sure Serbia joined CRS? This seems totally false
Official source: https://www.oecd.org/tax/transparency/AEOI-commitments.pdf

 

[joffreylol]

Serbia has signed in 2019. but I'm not sure when they will start implementing it. They are probably trying to figure out where to hide money for their corrupt government officials and oligarchs before starting CRS.

 

[newNomad]

Yes they signed that OECD convention which is basically signed by the whole world I see, even Ukraine and some other notoriously non-CRS states have signed (USA for example...), only some African countries are out
BUT, so signed and not implementing, what's the point?

 

[uplana]

Are you sure Serbia joined CRS? This seems totally false
Official source: https://www.oecd.org/tax/transparency/AEOI-commitments.pdf

Serbia has signed in 2019. but I'm not sure when they will start implementing it. They are probably trying to figure out where to hide money for their corrupt government officials and oligarchs before starting CRS.

Yes they signed that OECD convention which is basically signed by the whole world I see, even Ukraine and some other notoriously non-CRS states have signed (USA for example...), only some African countries are out
BUT, so signed and not implementing, what's the point?

Looks like you guys get off topic!

Payoneer is indeed the only EMI that is issuing and shipping their debit cards to users in high-risk countries. Until very recently they didn't even ask for proof of address before issuing the card (now they do since they moved to Ireland). Other EMIs like Wise are limited to clients in the EU/EEA.

They slowly start sorting on who they send the cards to, we already read lot's of places including offshorecorptalk that they began to blacklist some countries.

 

[evildoer93]

Could you tell me which countries are blacklisted from Payoneer? I'm not very active on this forum.

Anyway, Payoneer went public today; I think sooner or later they will ditch clients who are using their service to conduct petty tax evasion. It will be a major blow for Serbian freelancers. From 2022 only around $180 per month will be tax-free in Serbia. The rest of freelance income will be taxed close to 50%. Unemployment is high, and it's almost impossible to find a regular job abroad due to corona. They're caught between a rock and a hard place. And tax authorities are working overtime to fund the budget deficits.

 

[newNomad]

Could you tell me which countries are blacklisted from Payoneer? I'm not very active on this forum.

Anyway, Payoneer went public today; I think sooner or later they will ditch clients who are using their service to conduct petty tax evasion. It will be a major blow for Serbian freelancers. From 2022 only around $180 per month will be tax-free in Serbia. The rest of freelance income will be taxed close to 50%. Unemployment is high, and it's almost impossible to find a regular job abroad due to corona. They're caught between a rock and a hard place. And tax authorities are working overtime to fund the budget deficits.

And how does Payoneer know that a client is doing "pettit' tax ev"? Yet again why a bank, supplier, client or whomever needs mind my tax business?? Can't they just concentrate on compliance/KYC processes that the law asks them to perform and leave everything else to freelancer's decision, thanks
How can Payoneer know whether I might be a digital nomad travelling 5 countries every year or perhaps I even filled 5 tax returns in 5 countries and declared everything properly due to strategic reasons...

Instead of forums and beach bars working overtime to cater to all the new young Mojito-thirsty talent emerging globally, we have bureaucrats working overtime even in obsure places such as Serbia. After covid19 this is the 2nd largest madness

 

[evildoer93]

That question was already answered. Payoneer is rebranding itself, and it's probably just a matter of time before they stop issuing debit cards to non-EU/EEA clients and only allow them to withdraw funds to their bank account. And when you withdraw funds to your bank account, you can't hide them from tax authorities. But when you use Payoneer's MasterCard to withdraw funds on ATM, you can put cash in your pocket, and no one is going to find out.

It seems to me that Payoneer is shifting its focus towards big businesses rather than graphic designers from 3rd world countries who are making $500 per month on Fiveer and are using their debit cards to evade taxes. All major EMI are issuing debit cards only to residents of EU/EEA. Wise, Revolut, etc.

 

[Fred]

Could you tell me which countries are blacklisted from Payoneer? I'm not very active on this forum.

Anyway, Payoneer went public today; I think sooner or later they will ditch clients who are using their service to conduct petty tax evasion. It will be a major blow for Serbian freelancers. From 2022 only around $180 per month will be tax-free in Serbia. The rest of freelance income will be taxed close to 50%. Unemployment is high, and it's almost impossible to find a regular job abroad due to corona. They're caught between a rock and a hard place. And tax authorities are working overtime to fund the budget deficits.

Payoneer doesn't really have blacklisted countries beside of the usual ones like Iran.

However even if you register a Seychelles Company Account with them they will shut you down after 1-2 transactions received if they are not from AirBnb or Fiverr. They don't really support real B2B transactions and as more exotic the Jurisdiction of your Company is the more do they limit the service to you. We already had Latvian National Client that mentioned to us that Payoneer wouldn't issue him a EUR collecting account as it's against there internal policy to issue Latvian Citizens EUR collecting accounts.

The daily ATM withdraw limit of the Payoneer debit card with 5.000$ a day already indicates the major purpose of Payoneer and because of this is Payoneer not very transactional compared to Wise/Revolut as they let you withdraw 150k$ a month somewhere in Pakistan without a blink but as soon as your transactions are not from Fiverr/Paypal they will block you asap.

That question was already answered. Payoneer is rebranding itself, and it's probably just a matter of time before they stop issuing debit cards to non-EU/EEA clients and only allow them to withdraw funds to their bank account. And when you withdraw funds to your bank account, you can't hide them from tax authorities. But when you use Payoneer's MasterCard to withdraw funds on ATM, you can put cash in your pocket, and no one is going to find out.

It seems to me that Payoneer is shifting its focus towards big businesses rather than graphic designers from 3rd world countries who are making $500 per month on Fiveer and are using their debit cards to evade taxes. All major EMI are issuing debit cards only to residents of EU/EEA. Wise, Revolut, etc.

That's it.

Especially in countries like Serbia that become more and more Western with the Tax Authorities and the Taxes itself they will for sure either limit the service further or block service like the debit card.

I can imagine that in corrupt 3rd world countries where the majority even doesn't have a bank account - they keep providing the service like usual as they don't care in this countries about tax evasion as the tax authorities itself doesn't care or even don't have a possibility to enforce anything.

Unlikely but still possible is that even MasterCard can pull the plug on issuing Debit Cards to non-EU residents.

However we get a lot inquiries right now from Freelancers from Serbia, Montenegro and Moldova that are looking for Payoneer alternatives as they know exactly there is nothing else left should Payoneer change.

 

[eduon]

We are still in 2021 and I am interested in this thread.
Wise makes it clear that "they are studying" the CRS ...

Do you know anything about payonner?
Other EMI /as Wise) that "are studying" the CRS and not send information to the local tax authorities

 

[Fred]

Payoneer is using pooled/shared accounts that are not reportable under CRS for now.

 

[newNomad]

Payoneer doesn't really have blacklisted countries beside of the usual ones like Iran.

However even if you register a Seychelles Company Account with them they will shut you down after 1-2 transactions received if they are not from AirBnb or Fiverr. They don't really support real B2B transactions and as more exotic the Jurisdiction of your Company is the more do they limit the service to you. We already had Latvian National Client that mentioned to us that Payoneer wouldn't issue him a EUR collecting account as it's against there internal policy to issue Latvian Citizens EUR collecting accounts.

The daily ATM withdraw limit of the Payoneer debit card with 5.000$ a day already indicates the major purpose of Payoneer and because of this is Payoneer not very transactional compared to Wise/Revolut as they let you withdraw 150k$ a month somewhere in Pakistan without a blink but as soon as your transactions are not from Fiverr/Paypal they will block you asap.

I don't understand the point...why they are not trully B2B but instead "friendly" towards 3rd countries citizens evading taxes in their home countries...Why the income has to be only from Paypal, Fiverr....and who earns 150k month from fiverr lol

Lastly what do you offer now for freelancers from Moldova etc, in light of your post? What's the solution?

 

[Fred]

I don't understand the point...why they are not trully B2B but instead "friendly" towards 3rd countries citizens evading taxes in their home countries...Why the income has to be only from Paypal, Fiverr....and who earns 150k month from fiverr lol

Lastly what do you offer now for freelancers from Moldova etc, in light of your post? What's the solution?

There are a lot of guys in this countries including Marocco with E-Commerce/Dropshipping Business only receiving money from Stripe/PayPal. The ones that are doing well can achieve 150k a month.

However it seems that Payoneer doesn't care about this countries as much as they do about Serbia etc.

The freelancers / online marketers there are switching to Dubai Company Formation with Residence Visa and local UAE Business Bank account as with this setup still no CRS reporting is triggered and the home countires of them doesn't have the power to look after them. That's a long lasting reliable solution instead of having just Payoneer as backbone of your Business.

 

[newNomad]

However it seems that Payoneer doesn't care about this countries as much as they do about Serbia etc.

The freelancers / online marketers there are switching to Dubai Company Formation with Residence Visa and local UAE Business Bank account as with this setup still no CRS reporting is triggered and the home countires of them doesn't have the power to look after them. That's a long lasting reliable solution instead of having just Payoneer as backbone of your Business.

Well this seems reasonable, but one needs to account also for the cost of this setup. My guess is that it takes something like 5k to setup everything in Dubai plus perhaps 2k running costs a YEAR? (am I too optimistic maybe?)
Also my guess is that most of the freelancers in Serbia earn, on average, around double the average national salary, i.e. around 1k euro / month. Thus if their gross income is let's say 12k/year, how can they afford a solution like this?

In the past their running cost was 15 dollars a year to renew Payoneer card and now your experience is that they are ok to shell out 1,2,3...k ?

 

[Fred]

Well this seems reasonable, but one needs to account also for the cost of this setup. My guess is that it takes something like 5k to setup everything in Dubai plus perhaps 2k running costs a YEAR? (am I too optimistic maybe?)
Also my guess is that most of the freelancers in Serbia earn, on average, around double the average national salary, i.e. around 1k euro / month. Thus if their gross income is let's say 12k/year, how can they afford a solution like this?

In the past their running cost was 15 dollars a year to renew Payoneer card and now your experience is that they are ok to shell out 1,2,3...k ?

It's a numbers game and if they have to pay 50% taxes in future it's reasonable for anyone making some money.

Yes you are right for somebody making 1k a month it doesn't make sense to setup something in Dubai.

The ones with 1k a month doesn't have any other option should Payoneer start de-risk.

 

[evildoer93]

Most freelancers in Serbia make $500 - $600 gross per month. If they were making $1000+, they could set up a company in Serbia and still be profitable after paying taxes, since companies are being taxed less than individuals. But if you make $500 - $600 as an individual, you have to surrender a large chunk of your income to the tax authorities, and you can't survive with the rest. I'm not very optimistic that Payoneer cards will remain for long in Serbia since most freelancers switched from Skrill and PayPal to Payoneer to hide their income, so Payoneer became a big target for the authorities.

I think it's very irresponsible for Payoneer to go public and keep their business model, as it's fundamentally unsustainable unless they switch to B2B. A large chunk of their income will disappear overnight if authorities in Serbia decide to ban Payoneer cards, as they would lose at least 100,000 of their clients. How are they going to justify that to their shareholders? Freelancing was never profitable in Serbia. It became a booming business because, until 2020, tax authorities were not enforcing the tax code that was adopted by the parliament back in 2001.

In Serbia, some guys are doing e-commerce and programming. They are making serious money, have registered companies, and are paying taxes. But most freelancers are working on platforms like UpWork or teach foreign languages for peanut.

 

[JosephLL]

Serbian authorities cannot ban Payonner cards or any other for that matter, since there is no such thing. It's just a brand label stiched to a (at the endn of a card issuer chain) Visa or MasterCard. That's why they're shilling so hard for a domestic Dina one.

 

[Fred]

Serbian authorities cannot ban Payonner cards or any other for that matter, since there is no such thing. It's just a brand label stiched to a (at the endn of a card issuer chain) Visa or MasterCard. That's why they're shilling so hard for a domestic Dina one.

Serbian Authorities can put pressure on Payoneer to stop issuing cards to Serbians.

Due to the pressure and the fact that Payoneer is tradet public it's much more likely that they will follow this pressure to not have any negative press what again would not amuse the investors.

That's the point I war referring to.