Why is PayPal blocking my account according to U.S. tax law, if I&#39;ve a UK account only?
<p>I've opened PayPal account for my business and in My Profile I've clearly selected the UK address. My phone is UK, my bank accounts are UK and the balance is shown in GBP. So this is very clear to PayPal that my account is UK based.</p>
<p>However I've received the following e-mail which says:</p>
<blockquote>
<p>Your account access will remain limited until you add more information about your business.</p>
<p>Why do I need to add this information?</p>
<p>The Foreign Account Tax Compliance Act (FATCA), a U.S. tax law, requires financial institutions like PayPal to collect additional information from customers when a new business account is opened. <strong>You need to add this information even if your business or your customers are not United States taxpayers or located in the United States</strong>. We collect this information for regulatory and compliance purposes.</p>
</blockquote>
<p>By adding &quot;more information&quot; they mean to download U.S. form W-8BEN-E, fill it in completely and upload or fax it to PayPal, however I don't want to fill some U.S. form, simply because I'm not from the U.S and I don't want to share my confidential personal details with the foreign country. To clarify, my business doesn't have any clients from the US and my business is registered in the UK. And as an owner of the business I've never been to the U.S.</p>
<p>So my question is, why am I affected by a U.S. tax law? <strong>Do I really need to comply with U.S. tax law (having the business in the UK)?</strong></p>
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<p>The above quote from the e-mail says that I need to add this information even though my business isn't located in the U.S. However on the <a href="https://www.paypal.com/gb/webapps/compliancespartaweb/page/fatcaFAQ" rel="noreferrer">FATCA FAQ page</a> (requires log-in) it says:</p>
<blockquote>
<p>For accounts held outside the United States that belong to non-US persons, financial institutions such as <strong>PayPal must gather information from account holders providing that they are not US persons</strong>.</p>
</blockquote>
<p>For me this is contradictory to the previous quote (because here they ask me to prove I'm not a U.S. person) so I'm confused as to what I should do.</p>
<p>In other words, can my UK business somehow ignore FATCA requirements or not? Currently I'm forced to comply to the country compliance act tax (by filling <a href="https://www.paypalobjects.com/en_US/i/pdf/W-8BEN-E.pdf" rel="noreferrer">W-8BEN-E</a>) where I've nothing to do with it, which doesn't make any sense.</p>
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<p><a href="https://i.stack.imgur.com/OkMKd.png" rel="noreferrer"><img src="https://i.stack.imgur.com/OkMKd.png" alt="PayPal - Your account has been limited - Complete your business information" /></a></p>

<p>The reason that you are being asked to comply with a US law is because PayPal, a US company, is required to comply with US laws. If you do not comply, it is likely that they will be non-compliant and subject to sanctions.</p>

<p>For more background, FATCA reporting is used to identify businesses that a company does business with. In this scenario PayPal does business with you, 'Kenorb Inc', and so must prove to the regulatory agencies that you are not a US based company, hence the need for the W-8BENE.</p>

<p>In a similar way - people from other countries cannot simply ignore UK law when dealing with your business.</p>

<p>As for your quotes - they are not contradictory. </p>

<p>I am based in the UK and have 2 separate PayPal business accounts (for UK businesses). I have never had to fill in any US tax forms or any other forms.</p>

<p>Both of my accounts were at one point "limited" before supplying relevant documentation relating to the businesses. With one of the accounts I had <em>a lot</em> of trouble trying to supply the information through my online account (I can't remember the specifics but they were requesting information that blatantly wasn't relevant to the type of account and business involved—not the form you have been requested to fill in though).</p>

<p>After weeks of uploading different documentation with no luck I spoke to someone from PayPal on the phone and everything was resolved almost instantly with me sending relevant HMRC documentation. It seems PayPal's automated systems don't always know what they're talking about. Speak to a real person from PayPal and you're likely to get things sorted relatively easy.</p>

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