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Frequently asked questions about VAT for EU freelancers

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Community Guru
Joachim M Member Since: Mar 23, 2015
241 of 340

@Gabor K wrote:

Joachim, thank you very much!


Can I be VAT registered by being a common individual (not an entrepreneur)?

 

I have the same kind of VAT number,  what every citizen has.

 


Gabor,

 

In Germany we distinguish between VAT ID and tax ID. But yes, you can apply for a VAT ID. Even as a single person freelancer you are a business, not a common individual. Being VAT registered and not applying for the small business VAT exemption offers a number of advantages. The main advantage, you can claim back the VAT you have to pay on your purchases. You have to pay VAT on them anyway, but not asking for being exempted of charging VAT means the VAT you pay on your purchases is returned to you. 

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Marinela M Member Since: Apr 18, 2016
242 of 340

Hi there!

 

I don't think I have a VAT number, at least not in the format you need to be in. I believe my VAT number in the country where I currently reside is in fact my social security number. What should I do in this case?

 

Thank you.

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Community Guru
Joachim M Member Since: Mar 23, 2015
243 of 340

@Marinela M wrote:

Hi there!

 

I don't think I have a VAT number, at least not in the format you need to be in. I believe my VAT number in the country where I currently reside is in fact my social security number. What should I do in this case?

 

Thank you.


I have my doubts about the SSN being your VAT but your best point of contact is your revenue service/tax office (they provide information for free) followed by a tax consultant. 

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Alvaro G Member Since: Mar 10, 2016
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Hi Marinela,

 

What country are we talking about? Generally speaking, your Social Security number is never your Tax ID number.

 

Regards,

 

AG

 

 

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Jeanne V Member Since: Apr 28, 2016
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What if one is moving abroad outside the EU??

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Community Guru
Joachim M Member Since: Mar 23, 2015
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@Jeanne V wrote:

What if one is moving abroad outside the EU??


Jeanne,

 

Upwork cares only about the address you register with them. You move outside the EU, you update your address and that's it. 

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Sara M Member Since: Jun 24, 2016
247 of 340
Hi all,
I'm a freelance living in Italy i have my VAT registered and confirmed. I'd like to start working on Upwork but what i cannot get through of is:
How can i regular pay taxes on my earnings?
As all EU freelancers knows i need to make an invoice to the one i'm working for (exactly for the one who pay.)
So should i invoice clients directly or Upwork?
Very important my tax professional said i need to have invoices registered for all payments received, but i don't know who to invoice...
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Micael N Member Since: Jul 5, 2016
248 of 340

After having read all 22 pages of this thread in a row, I still ended up with the same questions as Sara M. And I also ended up with an anerysm.

 

I have been reading this thread while being irrationally supportive of the idea of sending an invoice to UpWork. It just seems so much simpler, you know?

Yeah, I know... a freelancer doesn't provide his services to UpWork. He provides them to the buyer, instead.

Also, if I understood right, UpWork sends the buyer an invoice on the seller's behalf... so if the buyer decides to file these invoices, the seller - who has been sending his invoices to supposedly the wrong entity (UpWork) - will be screwed. Did I get this part right? 

 

However, many people have been calling the invoices UpWork sends ridiculous, useless and illegal.

Also - and I'm not a seller on UpWork yet, so this is assuming - who actually deposits the money on the freelancer's paypal or bank account? Who's the payer here? If UpWork is anything like any other freelancing website, it is UpWork who pays. The entity that pays is the entity that gets the invoice. That's the logic I use when I work with my own personal clients anyway.

 

So little by little, at least in my head, the idea of seding invoices to UpWork directly seems to gain some validity.

 

Now's is when the experts come in and explain me why I'm wrong... 

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Community Guru
Joachim M Member Since: Mar 23, 2015
249 of 340
Micael,
Comments inline.
__________________________________________________________________________
@Micael N wrote:

 

I have been reading this thread while being irrationally supportive of the idea of sending an invoice to UpWork. It just seems so much simpler, you know?

Well, simplicity is not the solution, it would be much simpler to send no invoice at all. Unfortunatly bookkeeping requires correctness.

Yeah, I know... a freelancer doesn't provide his services to UpWork. He provides them to the buyer, instead.

Also, if I understood right, UpWork sends the buyer an invoice on the seller's behalf... so if the buyer decides to file these invoices, the seller - who has been sending his invoices to supposedly the wrong entity (UpWork) - will be screwed. Did I get this part right? Yes. Upwork is not your customer but a service provider or intermediary.

 

However, many people have been calling the invoices UpWork sends ridiculous, useless and illegal.

Invoices have improved, unfortunately the freelancer still doesn't get access to them. Hence you still have to write your own invoices.

Also - and I'm not a seller on UpWork yet, so this is assuming - who actually deposits the money on the freelancer's paypal or bank account? Who's the payer here? If UpWork is anything like any other freelancing website, it is UpWork who pays. The entity that pays is the entity that gets the invoice. That's the logic I use when I work with my own personal clients anyway. Okay, following your - flawed - logic, with your personal clients you send the invoice to your client's bank because that is the entity actually placing the money into your account. You don't do that? Well, the bank is an intermediary between you and your customer and so is Upwork. BTW, this holds true for all other freelancer platforms that I know of. They all only act as an intermediary between you and your client. As the platforms provide an escrow service and/or payment guarantees they also handle the payment process, a service just like the service your bank provides to you.

 

So little by little, at least in my head, the idea of seding invoices to UpWork directly seems to gain some validity.

 

Now's is when the experts come in and explain me why I'm wrong... 


 

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Perge B Member Since: Aug 28, 2016
250 of 340

Hello! I am from Hungary, and I don't hava a VAT number, as it is for enterprenaures and companies. can I work without a VAT number? can I get paid like this and pay the VAT by my own to the government?

thanks,

Bianka

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