A couple of months ago, we announced that due to changes in PayPal's terms of service, we would transition to having creators accept payments from customers directly to their PayPal accounts when selling on Gumroad. After months of engineering effort and legal consultations to make this transition minimally disruptive, we're ready to go live with direct PayPal connection. PayPal Connect goes live for all creators on January 1, 2021.
You're getting this version of the announcement because you've already connected a PayPal account to enable PayPal Connect. You do not need to take any additional action between now and January 1, 2021.
When we first announced the upcoming switch, creators from around the world let us know their concerns about how this will affect their tax, accounting, and compliance statuses. We're happy to announce that after consulting with a specialist law firm, we can assure you that nothing will materially change.
- Your weekly payout will include a line item for PayPal instant Payouts.
- You can still issue refunds to customers who purchased through PayPal.
- Gumroad's approach to sales tax is unchanged.
- The Transaction CSV (the immutable record of transactions you can download from the Balance page) has an additional column to see if a purchase was made through PayPal directly.
- Gumroad still serves as the Merchant of Record in jurisdictions where that matters.
- Gumroad is still considered the seller for VAT purposes and will continue to collect and remit VAT in the appropriate jurisdictions.
- We held off on the change until Jan 1, 2021 so that your 2020 records will be entirely uniform.
We'll be making a couple more announcements in the coming month about small tweaks we've been able to make to Gumroad's legal & financial infrastructure and VAT remittance inspired by the work on PayPal Connect. They are all good things, kind of a "silver linings" situation.
For more about PayPal connect, see https://help.gumroad.com/article/275-paypal-connect.
As always, if you have any questions or concerns, please let us know at firstname.lastname@example.org.