Czech bank wants to know what sort of 'Advertisements' I make money from
 

Apparently to do with new EU banking regulations. Was asked by my bank manager today how I earned my income and replied with the usual 'online advertising/marketing' and now I've received an e-mail from her saying her boss needs further details of what kind of advertisements. WTF??? Should I send her some hardcore banners?

You should fuck her boss.

Damn. That's a pretty bad direction.

Do you know why this came up? The volume? Or just general KYC stuff? Are you a local?

Let us know how things go.

Don't think it's volume because I don't make much and only one sponsor (VirtualRealCash) is paying me into that account.

Yes, I have a residence permit.

She did mention something about new EU banking regulations.

Surely banks in the Czech Republic aren't closing the accounts of adult affiliates now?

I see. Hope not. I have been building a small mainstream presence, which would be good to show in these situations.

Hopefully it's just normal stuff to prove that you're not doing business with sanctioned countries. VirtualRealCash is in the EU and has a valid VAT number. So if that's all you shouldn't have any issues.
Even if you show them your adult stuff, maybe it would be better to describe it as virtual reality technology for adults, rather than flat out porn. :-) At least CZ is quite liberal.

It's fucked up though. Hopefully crypto will be widespread in a few years and banks won't be so important anymore.

Also, is this a newly opened bank account?

They want to make sure you're not part of the 2018 Putin alt-right Facebook online advertising scheme

Agreed. I have several mainstream sites but none of them look like they could convince a bank manager that they are making money (and they aren't). I have some sex toy affiliate sites which make a little coin, so I'll show them first if I have to give them examples of sites.

Are you sure? They don't know this business :)

If they get hundreds of views per day, that may sound like a lot to them :P

I wonder if your account was flagged by an algorithm, or just the bank teller couldn't figure out what you were doing.

Also one more thought. I think company accounts are a lot better for receiving international payments. Personal accounts with incoming international wires may raise more flags.

Fucked up, but that's the way it is.

Since it's not a lot, just say you're starting out and doing media buys pushing amazon products. I doubt they will start asking for URLS and if they do then you tell them you don't have any because you buy ad placements through Google AdWords.

1. is this a business account?

- if so, you don't need a business account, there is no law that would require opening a business account for business. Just use a personal account. They are cheaper anyways. Business accounts are the typical ripoff. They call that a "business account" to put extra charges and to attract people that do larger transactions. Been using personal account for ages, never had any problem. The tax authorities don't ask what type of account you have. They just want to know the number. ;-)

2. do they want to see your sites?

If not, just tell them that you make commission from reselling various products through your websites. And if they resist to see the urls, just make a cover up site, a landing page with some links. Takes a few minutes.

People out of the business don't understand how affiliate marketing works .. so I don't believe they would really find out.

Heads up : They are generally not adult friendly.

only btc is the way from this fucking bank hell

This depends on the local laws. If you are a company, you can't get a personal bank account as far as I know.. If you're an sole proprietor, you *may* be able to choose.

Yes, but since he claims he makes little money, I believe he is a sole proprietor.

You don't need a business account if you are a sole proprietor. I checked this. Been using a personal account for my business for years and I sure do receive international wires. Never had a single problem.

Thanks for the advice guys. Yes, it's a personal account as I was told there is no need or requirement in the Czech Republic to set up a business account for a sole trader. I opened the account three years ago and not had any problems thus far. I think it's probably just the boss wanting something a bit more specific than 'online advertising' as my manager probably put down on the form she sent him.

If it comes to it, I could have VirtualLife pay me into my UK account. I can't see how my Czech bank could object to how I make my money if it's perfectly legal in the Czech Republic and if I'm only transferring money from other accounts to pay my rent and bills. And yes, as BigFurry said, VirtualLife (VirtualRealCash) are as legit as any in the adult industry.

Bank Boston kicked me out when they discovered my online advertisment :)

Unfortunately they can close an account if they don't like the line of business they're in - even if it's a legal business otherwise.

I'm not in the CZ but I have heard of different banks kicking out adult companies.

Just change your bank. I have never experienced anything like this. My bank has never asked me anything about my business.

Which bank is that, so i can know to avoid them. I didnt have any contact with my bank since i opened account, tho my account is marked as personal with trade license.

BankBoston
BBVA
Scotiabank


avoid ...

I'm explaining it as a former bank employee. There is no automated system for monitoring payments and wires. Someone has to file a signal. In your case, it's probably your personal banker. There are anti-money laundering measures, so they are interested in the origin of funds, and not what kind of business you're doing. My advice-stop using them. You're already on their black list.

I'll bite. Why not ask what regulation specifically requires them to ask you?

Its just an AMLA thing. Dont worry

I am not sure why bank have to bother with that anyway, since tax department can see your bank accounts at any time and they are the one who ask questions about what exactly you doing.

Since last year I've been required to fill out these long forms every time I want to cash a check (in Norway). I have to write down my own adress, the sender of the check's adress and account number etc, all info that is already written on the check :mad:

This is so tedious. For years I've just sent the checks in the mail with my signature and account number..

They also ask how the money is made, I just put "ads sold on the web" and so far they haven't asked any further questions :D

If they do I will just go to the bank across the street :thumbsup

Its a money grab by the govenment making sure you have paid the VAT ( in Czech DPH). If it is pan Europan payment there is VAT due and must be paid.

Huh? There is no such thing as VAT when it comes to European payments. I am not required to either pay it, nor charge it when i deal with european companies.

Create US LLC comapny and create corporate paxum account for example

If you deposited cash only, I can see the question. But you’re depositing business checks. What about saying you work online looking to place ads for companies. That way, if you’re not making much, you have an excuse. If it’s larger payments, you look online for places to advertise for companies. You don’t place the ads but review ads and seek new sources for advertisements. You can dummy-up a page quickly

I’m in Massachusetts but had a California bank account. No one ever questioned why my checks were from California.

my account at chase bank here in the USA was closed .... just tell them something normal... I run a bunch of sites ranging from dog food to dating, then sell the traffic and make ad revenue... is that cool? I have 2 face book accounts for mainstream

:1orglaugh:1orglaugh:1orglaugh

I was audited by the IRS, my biz was 'black helicopter entertainment'. the IRS asked my account that I did, he replied that I gave helicopter tours... :2 cents:

you can run sole proprietor biz accounts with a DBA

yeah but when you are writing checks to 'adult talent management' wtf right?

tell them you buy ads on google adwords and sell amazon products., like mobile phones.

i did the same and it worked for me.,

i got call from bank regarding the some fishy transactions, i told them its from online marketing and some were from bitcoin trading.

2 guys even visited my place for some anti money laundering thing.

i asked them if there is any issue with my account and i need to close it , they said , nope. so dont worry,

Visited your place? I am quite sure no bank in Europe would send people right to your door, they either send letter or call you.

If a company pays or issues an invoice even into a personal account you are obligated to charge and file VAT. If One party is OUT of EU then not. Person to person does NOT either.

Banks are not a tax authority, they're not checking if you're paying taxes. They only care about avoiding money laundering, money from illegal activities, and sometimes reputational risk.

In many EU countries small businesses and entrepreneurs can register to be exempt from VAT.
https://europa.eu/youreurope/busines...s/index_en.htm
As you can see, in the CZ the limit is around 39000 Euros.

Either way, it's not the banks job to check if you're paying VAT. You could pay it from a different bank, not just theirs.

Correct, banks cant know how do you regulate VAT or not, they cant know anything, they can only "suspect" as you say but dont see point of suspecting since tax service have insight into account at any time. Perhaps they would suspect only in case if you registered as foreign account(since local tax service does not have insight into such accounts), but in my case i am registered as resident account so i doubt how i will ever be asked anything.

Also, regarding VAT - EU company need to charge VAT to other EU entity only if that entity is - person, or business person/company which is not in VAT system, however in CZ there is a thing called Light vat id, alias "identifikovana osoba", which i have and as result i do not need to pay VAT when dealing with EU companies, nor i need to charge it and i am still not registered as VAT on local level . This is made strictly for dealing with EU, so no need for it in case you are not doing bussiness with EU companies at all. So this allows to stay out of VAT but still not paying EU vat.

And speaking about VAT threshold, that info is partially correct - it applies only if you do 39000 EUR localy, if you do bussiness outside CZ only then limit is 4x time bigger.

So you are exempt from paying VAT (below the annual limit) - but at the same time got a European VAT ID to be able to do B2B in the EU properly.

Yep, works similarly in some other EU countries too.

Yep, and the irony none of accountants which i asked about it had a clue about it, including company which i used for dealing with papers and accountant which i use currently.
I think it's due fact how when dealing with EU companies it's not VAT deduction, but VAT auto-deduction, so if someone would charge me VAT on invoice i wouldn’t be able to deduct, unless it wasn’t been included in invoice at all, ie. auto-deducted.

Well... I think auto-deduction is not the correct term. EU B2B services are a reverse charge. It's not 0% because it's VAT-free or already deducted. It's 0% because the buyer side is responsible for adding the VAT. (Of course right after adding they can also deduct, IF eligible.)

With your setup (not VAT registered, but have a EU VAT ID), you are basically a private person in the dealings:
1. local companies have to charge you VAT
2. you can't charge VAT,
3. you can't deduct the VAT from the invoices from local companies
Basically you are like a private person, a VAT "endpoint", who pays VAT for real when buying something.

Now with EU B2B it gets strange.
- B2B EU income: you don't charge VAT for B2B services when getting income, that's clear
0% VAT on the invoice, the other side is responsible for paying it. It's not 0% because you are VAT free locally, but because it's a reverse charge because of EU laws.

- B2B EU expenses - if you get a 0% VAT invoice from an EU company, you may need to self-asses the local VAT for it and pay it
Your side is responsible for paying it. Normal VAT registered companies add then deduct this VAT, effectively paying 0% VAT. (The VAT will still be paid down the line of course, when they sell something to an "end-user".)
If you're not VAT registered, you can't deduct, and you may be responsible for adding the local VAT to the 0% invoice, reporting it via a special form, and paying it.

This is a stupid quirk of course, that originates from you getting 0% VAT invoices from EU businesses (because you've got an EUVATID), which you don't get from local businesses.

About this special case, I wouldn't be surprised if not all countries enforce self-reporting and paying it.



I personally find these "special tax status"/"VAT exempt" things to be too much trouble when doing international business. My experience is the same, most accountants don't know the rules for these special cases (special tax status + international transaction).
If you're only doing international B2B, and not selling anything to locals (or private persons abroad), you don't get any extra money by being VAT-exempt. But if you get big advantages on other kinds of taxes because of it, it can still be well worth it of course. :)

No, the bank has nothing to do with charging VAT, it is your duty to register for it and pay that at the local tax office

You can be a VAT payer but don't have to be unless your yearly turn-over is above 50,000 € (locally it is exactly 49,790€). If you are not a VAT payer:

1. as an EU businessman you are obliged to pay VAT if and you order goods from another EU country into the country where your business is located IF the value of the goods is above 14,000 € (may differ between the countries). Bank has nothing to do with charging VAT.

2. same as #1 applies if you ,as an EU businessman, order services from a company located in anohter EU country (e.g. hosting) though in this case there is no minimum value, so you always need to register for VAT before ordering services for your business. You also need to register (not pay) if you deliver B2B services into another EU country where the customer/client (another business) pays the VAT. Generally, the VAT is paid in the country where the service is utilized in case of B2B.

The VAT registration and paying as defined above does not make you a regular VAT payer (if you are not one), it is just for the purpose of B2B international trade/services in EU.

If you order hosting services from a company located in another EU country as a regular customer (non-business person), it is the hosting company that pays VAT and you dont need to register for it. :2 cents:

..that's why I use my hosting account as a regular customer and don't put that in my business expenses.

For anti-laundering I could see it being possible.

If a bank client gets busted for laundering money, it can cripple the bank. They have a very vested interest in investigating anything even remotely suspicious.

They kick out others, too. The bank has the freedom to decide who they do business with. If they don't like yah, they can cancel the account.

A week before I saw my personal manager I had e-mailed her a query regarding depositing Ukrainian cash into the branch, lol. It honestly didn't occur to me that this might be regarded as suspicous, but then I'm pretty naieve. Last year I made a few trips to Kiev because I was chasing a woman there, and I kept withdrawing their ridiculous currency from the ATM not knowing how much I had in my wallet. Anyway, when I came back after my last trip (no plans to visit there again anytime soon) I realized I had about 1,500 euros worth of Ukrainian Hryvnia. So I naievely asked my personal bank manager if I could deposit the notes into my account in the branch. I guess she probably flagged me for that.

I've been paying my VAT. I was under the limit until Czech VR paid me last year, so then I had to move on to the full VAT system here.

Lol, I better tidy my place then.

I doubt if it can as serious as that. My only payments have been from one very legit company and one big payment from Naughty Revenue a year or so ago paying me back some of the money they owed.

If it's the visits to the Ukraine and asking my manger if I can despoit a few left over holiday cash from there, then why the hell is the EU letting the Ukraine have freedom of movement if it's such a dodgy country (and it is, lol)?

Quite possible in my opinion. Banks are generally more cautious about cash deposits than bank transfers. If you add Ukraine with the current situation there, they've got a reason to flag you for a KYC procedure I guess.

Doesn't mean that they still won't kick you out if you flat out say you're advertising online porn though. :/