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Frequently asked questions about VAT for EU freelancers

Ace Contributor
Sara P Member Since: Jul 22, 2010
61 of 316

@Joachim M wrote:

@Garnor M wrote:

Hi Meg,

We're working on this and aim to have this information available for you by early 2016.


Only after this has been addressed satisfactorily will I enter my VAT ID as freelancer. VAT will be due either way. 


Wise choice.

By now, dealing with clients outside UpWork is way easier.

 

 

 

 

Active Member
Wim J Member Since: Nov 24, 2014
62 of 316

@Garnor M wrote:

Hi Meg,

We're working on this and aim to have this information available for you by early 2016.


 hi Garnor,

 

I believe the date it all starts is 1 jan 2016.

 

Upwork is now covered for there service fee.

But leaving the client and the freelancer in the cold till AFTER jan 2016? 

 

But please take note,  yes you are charging the freelancer. And yes all the income Upwork earns are paid by the freelancer.

 

but the start of all that money comes from the client.

 

If business clients start to get trouble with invoices printed on "VAT Reverse Charged"

but no VAT ID at all of the freelancer is written on that.

What means the client is evading VAT, criminal charges are on that.

The accountant department of the clients will advice to stop spending on Upwork.  At least in the EU. And big parts of the money flow will dry up.

= No work for the freelancers, no commissions to charge on.

Some geographical lessons:

we are with 508 million people and 28 member states.

https://en.wikipedia.org/wiki/Demographics_of_the_European_Union

That are a lot of potential clients to miss out.

 

Please, look also to the clients that keep this business running. It is a great business model, but if the law starts to forbid us, there is no way then to follow it. Even if we like it a lot.

 

Please give the freelancer the control of the invoice given to the client. Your Terms and Conditions are already placing all responsibility on the freelancer to provide a formal invoice to the client.

There is nothing to lose on for Upwork not doing it.

The long hesitation of Upwork to allow a VAT nr on the invoice to the client in the name of the freelancer, speak a lot.

 

I understand that Upwork wants to protect the freelancers that do want to work in the anonymity. But at least give the others that do want to work official the change to choose for them self.

 

After all, the deal is between the client and the freelancer.

If the client chooses to pay a freelancer that is not declaring his income, then that is the risk of the client. Upwork doesn't take any responsibility on that.

 

But now, all are in the gray zone. And soon I predict big shocks by clients who see the words "VAT Reverse Charged" printed on there invoice they give their account office.

 

It is not anymore as paying someone and who cares if he declares that.

Now each client that has those words printed on "VAT Reverse Charged"   needs by law to declare those invoices and pay VAT taxes in his country.

If not it will be considered as VAT fraud.

here http://www.foreigninvestments.eu/en/fdi/expert-topics/vat-fraud-with-intra-community-trading-and-how...

 

how to prevent it, their suggestions are:

 

 

  • Detail all required information (e.g. VAT numbers, customer and delivery address) on invoices issued;
  • Check that all required information (e.g. VAT numbers, addresses) is mentioned on invoices received and, if information is omitted or incorrect, request a corrected invoice;
  • Verify the VAT numbers of new suppliers or new customers with the tax authorities or through VIES (VAT Information Exchange System) available at http://ec.europa.eu/taxation_customs/vies;

 

If the clients do not get the VAT nr of the freelancer printed on the invoice, and has an invoice with the words: "VAT Reverse Charged"  then he/she/company is in serious trouble.

 

Please work on this ASAP and do not leave the client and the freelancer in the cold. It can get very cold after jan 2016!

 

Ace Contributor
Meg E. T Member Since: Jul 9, 2015
63 of 316

@Garnor M wrote:

Not with this change Pedro. 



Garnor: Then WHEN will freelancers have the proper information to take care of VAT responsibilities on fees we charge our clients????

 

How can Upwork justify becoming VAT-compliant ONLY for the 10% fees?

 

Freelancers need full transparency on the invoicing to clients. Period.

 

Please fix this.

Active Member
Diego Z Member Since: Jun 22, 2015
64 of 316

As far as i know, not really. We are providing services TO Upwork, not to the clients, so invoice is adressed to Upwork.

 

 

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

@Diego Z wrote:

As far as i know, not really. We are providing services TO Upwork, not to the clients, so invoice is adressed to Upwork.

 

 


Diego, no. Upwork is an intermediate. You are dealing with the customer, not with Upwork. Ask Upwork Lena by personal message if you don't believe it.

Community Guru
Ela K Member Since: Feb 9, 2015
66 of 316

@Diego Z wrote:

As far as i know, not really. We are providing services TO Upwork, not to the clients, so invoice is adressed to Upwork.

 

 


 What service have you been providing to Upwork in the past 2 years?

 

Unless you actually freelance for Upwork - do you send & address your proposals to Upwork? Does Upwork send you job offers? Have you ever been hired by Upwork? Do you submit your work to Upwork? Do you think Upwork charges your fees to its company credit card?

 

I would encourage you to read Upwork's TOS very carefully. ASAP.

Active Member
Adrian D Member Since: Oct 28, 2015
67 of 316

@Garnor M wrote:

Not with this change Pedro. 


I have created an agency at Upwork, using my legal business name. Please understand that in order to legally invoice clients, according to EU regulations, we need access to client's name and address and get a copy of the invoice sent to the client.

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68 of 316
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@Garnor M wrote:

Not with this change Pedro. 


More new questions and no answer... 

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

@Pedro V wrote:

With this new change will freelancers be able to have access to the info needed to properly invoice a client? I I want and need access to that client information in order to send my own invoices and make sure they comply with my country's tax laws.


Pedro,

 

I just noticed's Garnor's reply. You then shouldn't enter your VAT ID into your profile. Because if Upwork also puts it on invoices to your clients you will be in trouble. The client will report the transaction using his and your VAT ID. You can't report it, because you don't have the necessary details. This will most certainly raise questions by your revenue service. 

Active Member
Wim J Member Since: Nov 24, 2014
70 of 316

Joachim M wrote

Pedro,

 

I just noticed's Garnor's reply. You then shouldn't enter your VAT ID into your profile. Because if Upwork also puts it on invoices to your clients you will be in trouble. The client will report the transaction using his and your VAT ID. You can't report it, because you don't have the necessary details. This will most certainly raise questions by your revenue service. 


 I do not see any problem asking a copy to your client.

BUT untill now, there are NO VAT ID printed from freelancers on the invoice given to the client.

Only agencies are already in rule with that.

 

Freelancers are missing the VAT ID on the invoice