Hello everyone!

I am seeking some guidance regarding a tax-related issue that one of my friends, based in Sabah, is currently facing. She is partnering with an individual in the US to sell digital software and services. In this partnership, she provides a PayPal account and handles tasks such as monitoring income, issuing refunds, managing disputes, and overseeing accounting activities. Most of the software and services, however, are managed by her US-based partner.

Recently, she discovered that she needs to pay taxes, which has come as a surprise to her, as she has never had any experience with tax obligations or understood them in detail.

To provide more context, the business income is withdrawn to her bank account, from which she receives 10% of the total income, while the remainder is sent to her partner via international wire transfer. The business generates an income ranging between $2,000 and $9,000 USD per month, with fluctuations.

She is concerned and unsure about how to proceed with the tax payment process. Specifically, she is wondering if she is required to pay tax on the full income or just the 10% she receives.

Could anyone clarify how tax payments work in this situation, and what steps she should take to ensure compliance?

Thank you for your help and advice.