HOW to save tax in affiliate marketing?

[harnur]

Hello,

I am from India. All the advertisement companies that I work with..ask for top-up in USD currency.

But all the banks in my country charge 4-5% currency conversion tax for international transactions(USD, EURO etc). And 5% TCS tax for foreign transactions.

And since i am doing it on a huge scale, this 8-9% tax comes off as a huge amount at end of each month. And all the banks charge some or the other tax.

So, does anyone knows any solutions to this?

Maybe, i can top-up money in an online card and spend the money using that card itself, so, i can save tax that my bank charges.

 

[GriD]

Hey @harnur,
You should change the title if your thread...
What you are talking about are not taxes but Currency Exchange Fees...
The best way to avoid them is to have an account in US$ if this is allowed in India???
Can you open an account with an online bank like Revolut or Wise (formerly Transferwise)?
(and I suppose there are others...)
That way your payments in US$ will go to that account and you can pay your traffic sources directly in US$ from that account - no exchange required...
That's how I do it because otherwise I would constantly be paying currency exchange fees from US$ to € and back...

I don't know about Revolut as I don't have a Resolut account but a Wise account is free...
Also the currency exchange fees Wise charges to your local currency is way lower that what your bank would charge so transferring US$ funs to your account in your currency is also advantageous...
(Not posting it here but I'm sending you an invite link for wise, I think they offer you one free international transfer if you sign up using that link...)

 

[Graybeard]

You need to have a US 'instate' address to open a US bank account. Or, a foreign corporation with a physical office.
Be wary of middlemen with any large amounts.
Maybe there is a US bank doing business in India. You are not going to escape a government transfer tax --that is paid at the source in India.

And 5% TCS tax for foreign transactions.

maybe the 5% exchange rate can be reduced some.

 

[GriD]

You need to have a US 'instate' address to open a US bank account. Or, a foreign corporation with a physical office.

This is correct but you don't need a US bank account, just an account in US$ currency... So this should not stop you...

Maybe there is a US bank doing business in India. You are not going to escape a government transfer tax --that is paid at the source in India.
maybe the 5% exchange rate can be reduced some.

Yes, this is country specific... I don't know about India but in the EU (Belgium at least) You are allowed to have foreign bank accounts as long as you declare them to the government... As said, I have a bank account with 'Wise'... The Belgian tax authorities are aware of this so this is not to escape any taxes...
The 5% currency exchange fees @harnur is paying now: these will be greatly reduced:
- A US$ payout from a network will be in US$ on the account - no currency exchange fee...
- Traffic sources can be paid directly in US$ directly from that account - no currency exchange fee...
- Only pay a currency exchange fee on the funds taken out of the account to be used in another currency, paying the Wise currency exchange rate which is within the lowest on the market...

 

[parveenk2013]

You can get a USD account in India. Many banks are providing it, just go to your bank and ask them.

So that you can get your payments in that USD account without any conversion fees, then you can re-invest those dollars directly from that account and just convert the profit money into your INR account.

Also, if you will talk to your bank and explain your business (also tell them that if you can't help then I'll switch to a different bank), they can reduce the conversion fee and taxes for you. I've done it personally.

 

[jess007]

Never faced such problems...

 

[Landagrinn]

The desire to somehow save money on commissions always leads to a lot of spending.
This is normal, everything has its price.

 

[Odinson]

Many banks provide it; simply go to your bank and inquire. You can re-invest those dollars directly from that account and only transfer the profit money into your INR account if you can obtain your payouts in that USD account without any conversion costs.

 

[kata]

I just want to congratulate you @harnur on your achievement as the best affiliate at the AW forum Dubai 2024.
I hope you will share your affiliate journey in this forum.

 

[Graybeard]

But all the banks in my country charge 4-5% currency conversion tax for international transactions(USD, EURO etc). And 5% TCS tax for foreign transactions.

That is 4-5% currency conversion + 20% Now!!

Tax Collected at Source (TCS) – Rates, Payment, and Exemption

Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Learn everything about TCS like its rates, payment, applicability, exemption and example.

cleartax.in

Get paid in and pay out using a middleman account (PayPal other) or in digital currency exchange that NEVER enters India.
That is government theft!

 

[Pollyyyy]

When it comes to saving taxes in affiliate marketing, it's essential to properly manage your earnings through efficient payment systems. Using platforms like PayPal, Stripe, or Payoneer can help streamline payments, reduce fees, and ensure smoother tax reporting. For more in-depth details on all about payment systems, I recommend checking out Rates https://rаtes.fm/payment-systems/, which provides a comprehensive guide to payment systems tailored to affiliate marketers and small businesses alike. It's an excellent resource for understanding how different systems can benefit your financial strategy and tax management.