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Re: Frequently asked questions about VAT for EU freelancers

Community Guru
Joachim M Member Since: Mar 23, 2015
271 of 316

@Stoyan D wrote:

I'm having serious issues when working through UpWork and trying to make everything legal. Here's the issue.

 

Regarding the EU laws, when I (my company) receive money I need to invoice the company I'm getting the money from. So there are 2 possible options here :

  • Invoice UpWork
  • Invoice the "real" client

 

The first option is impossible because of many reasons, that's obvious.

Now the second option is what seems to be the logical one, right ? Yes, but in reality it's still impossible. UpWork is being invoicing my clients on my behalf (which is another illegal act regarding the EU laws).

Nothing illegal in doing that, many companies outsource invoicing, right up to payment collection. Just what Upwork is doing.

 

I had to contact each my client and ask them to send me back the invoices which UpWork has been sending them.

 

What for? You know the invoice amount. Just send out invoice for this amount and you are done. What might be a challenge is getting the address details of the client.

 

But this again is not working, because of the number invoice. It has to be sequal , I can't declare a "random" invoice number, it's still illegal.

 

The EU doesn't care. We have this requirement in Germany too. As I send out invoices to the client my invoices are sequential.

 

The only "legal" solution I've found is to ask my customers to ignore the invoices that UpWork is sending them and I have to create another invoices, for the same amount but with different invoice number and of course my company details. And it's still far away from the perfect solution.

 

True, it's not perfect but it works until Upwork finally gives us access to the invoices just as their competitors do.

UpWork, why don't you make it easy for the European Union ? I perfectly realize that your target is USA and Asia but hey, EU is not that small either Smiley Happy In the same time the issue I'm talking about is based on one of the most common financial terms of EU so how didn't you find a solution for this ?

 

I just want to work legally, declare my income and pay taxes. Currently I can't.


 

Active Member
Georgios M Member Since: Dec 5, 2016
272 of 316

Hello Upworkers,

 

Please make this as simple as possible:

 

I just moved into Germany and I DO NOT have a German VAT. My registered address in Upwork is German. I cannot provide a valid VAT because I do not have one. Will Upwork collect the tax for me and give it to Germany even though I do not have a German VAT?

 

Simply: Can I get in trouble without a VAT or does Upwork got my back?

 

Ps: If it matters, I do not intent to make more than 8.000 Euros/year which is the German tax free allowance.

 

Thanks guys,

 

George

Community Guru
Joachim M Member Since: Mar 23, 2015
273 of 316

@Georgios M wrote:

Hello Upworkers,

 

Please make this as simple as possible:

 

I just moved into Germany and I DO NOT have a German VAT. My registered address in Upwork is German. I cannot provide a valid VAT because I do not have one. Will Upwork collect the tax for me and give it to Germany even though I do not have a German VAT?

 

Simply: Can I get in trouble without a VAT or does Upwork got my back?

 

Ps: If it matters, I do not intent to make more than 8.000 Euros/year which is the German tax free allowance.

 

Thanks guys,

 

George


 George,

 

Upwork will collect the VAT you are due from you and hand it the tax authorities in Germany via MOSS.

Community Leader
Teri S Member Since: Oct 17, 2011
274 of 316

@Georgios M wrote:

Hello Upworkers,

 

Please make this as simple as possible:

 

I just moved into Germany and I DO NOT have a German VAT. My registered address in Upwork is German. I cannot provide a valid VAT because I do not have one. Will Upwork collect the tax for me and give it to Germany even though I do not have a German VAT?

 

Simply: Can I get in trouble without a VAT or does Upwork got my back?

 

Ps: If it matters, I do not intent to make more than 8.000 Euros/year which is the German tax free allowance.

 

Thanks guys,

 

George


Just to clarify, Upwork collects and remits the VAT you need to pay to Upwork for the services Upwork provides to you: the service fee, upgrade fees and extra connects.

 

Upwork does NOT collect, remit or handle in any way VAT that you are required to charge your customers for the services you provide them. If you are required to charge VAT to local and EU customers, you have to provide your own invoices with the VAT clearly included in the final price that the client pays, and then remit that VAT to the tax office yourself.

Highlighted
Active Member
Georgios M Member Since: Dec 5, 2016
275 of 316

Should I declare my income and business activity to the German Tax Authorities, or does Upwork do that for me through MIni One STop Shop (MOSS)? 

Community Guru
Joachim M Member Since: Mar 23, 2015
276 of 316

@Georgios M wrote:

Should I declare my income and business activity to the German Tax Authorities, or does Upwork do that for me through MIni One STop Shop (MOSS)? 


 Your tax filings are none of Upworks business. You'll have to file your taxes yourself. The threshold of 8,000 Euro is irrelevant. As a freelancer you have to file your taxes and all your income - from employment and from freelance work - is summarized and you owe income tax on all of it. Nothing to do with VAT, that's completely separate.

Active Member
Georgios M Member Since: Dec 5, 2016
277 of 316

Thank you sir. For both answers. 

Community Guru
Joachim M Member Since: Mar 23, 2015
278 of 316

George,

 

As tax filings in Germany can be quite complicated, Google for "Lohnsteuerhilfeverein" for the area you live. They are not expensive and provide all the help necessary.

Active Member
Jochem G Member Since: Nov 23, 2016
279 of 316

Hi all,

 

Thank you very much for your clear explanations on how to send these invoices.

 

I just want to add that for Dutch freelancers, the tax authorities require you to add the VAT-number of your client to the invoice, even though you use the 'reverse charge' method.

 

If you can read Dutch, this is all mentioned here: http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/zakendoen_me...

 

Active Member
Sami K Member Since: Dec 13, 2016
280 of 316

Can't be bothered to surf through 20+ pages of comments to see if this has been handled. Probably not since it hasn't been updated to the FAQ.

 

I live in EU country X. I have a VAT number in country Y and do my business through that. You don't accept the VAT number because it's "invalid format."

 

This is a constant nuisance in living abroad. Every place expects me to have address in country Y or otherwise it's always the "you're wrong, we can't do this."

 

So, how do I handle this? How can I get you to accept my proper VAT ID even though I don't have an address in that country at the moment?

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