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Frequently asked questions about VAT for EU freelancers

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Vladimir G Moderator Member Since: Oct 31, 2014
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 Hi Tom,

 


Tom G wrote:

 

This forum makes it very clear that once approved I will not pay VAT on any fees that Upwork charge to me - I understand this. What is not clear however is what happens when my company does work for a UK based client through Upwork?


Just to clear any confusion, Upwork will only charge VAT to you on its fees for using Upwork. No VAT will be charged by Upwork to you on the fees charged by you to your client. Upwork does not charge and does not take responsibility for VAT that may or may not be due on charges by you as a Freelancer to your client. This is something for which you as a freelancer remain responsible.

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Tom G Member Since: Apr 21, 2020
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Thanks for the response Vladimir.

 

For the avoidance of doubt, if I'm responsible will Upwork have a problem with my company sending an off-platform invoice for the VAT amount to any UK based clients (as suggested by Micael N)?

 

Kind regards, Tom

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Valeria K Moderator Member Since: Mar 6, 2014
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Hi Tom,

 

Yes, you can create a separate invoice for the VAT charges in order to be compliant with your government's requirements. It will not be considered a violation of ToS.

~ Valeria
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Tom G Member Since: Apr 21, 2020
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Many thanks for the clarification.

 

Kind regards, Tom

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Micael N Member Since: Jul 5, 2016
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Notice that all these "clarifications" are regarding sending a off-platform invoice to the client, not receiving an off-platform payment from the client regarding the VAT.

 

And that matters, because either:

 

1. It's also allowed to receive an off-platform payment for those extra 20%: you charge 100£, Upwork gets its 20%, the client pays you 20% VAT outside of Upwork, and you end up with 80£ profit

 

2. Or it's not allowed, and you'll have to charge extra 20% within Upwork to cover for it. If that's the case: you charge 120£, Upwork gets its 20%, you'll have to take 20£ for VAT, and end up with 76£ profit.

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Vladimir G Moderator Member Since: Oct 31, 2014
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Hi Micael,

 

Your second point is correct, all payments need to be processed through Upwork as per Upwork TOS.

 

The process from your first point would constitute circumvention, which is prohibited by Upwork TOS. You can find more information in Section 7. Non-Circumvention of the Upwork User Agreement. 

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Alban K Member Since: Aug 30, 2017
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Hi,

 

I am from Albania, do I have to pay VAT? We dont have such kind of taxes in my country.

 

Kind regards,

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Joanne Marie P Moderator Member Since: Nov 26, 2017
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Hi Alban,

 

Upwork charges VAT to freelancers and agencies in certain countries unless specific exemption requirements are met. Upwork is required to collect this tax and pay it to the appropriate government agency. You may want to check with a local tax advisor in your area for further assistance with this. Thank you.


-Joanne
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Shayan H Member Since: Dec 25, 2018
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Hi, my country asks me to pay 19% of my income as VAT that I must have taken from my customer to the tax office. Do you charge my customer with this amount of money or not?

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Micael N Member Since: Jul 5, 2016
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You wish. You have to pay it from your own pocket.

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