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Frequently asked questions about VAT for EU freelancers

Community Manager
Garnor M Community Manager Member Since: Oct 29, 2014
81 of 316

@claudia n wrote:

Thank you Garnor And Joachim for your valuable details .

Can you please also let me know this .

How the information regarding VAT I will be disclosed with our countries' tax offices? I don't recall adding any tax identification numbers to the site, even address wasn't verified in any way. Is it going to be bulked up e.g. monthly transfer between UpWork and Romania/Bulgaria etc , or individually for every single freelancer? 

Thank you and please let me know , 

Claudia N


Aggregate VAT amounts are reported when we submit our VAT payment to the EU via MOSS so we're not sending it with your personal information.

 

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@Garnor M wrote:


Aggregate VAT amounts are reported when we submit our VAT payment to the EU via MOSS so we're not sending it with your personal information.

 


 Yes, however, Upwork has to record and store all names and addresses of the freelancers for 10 years and give access to this data to the European tax authorities on request.

 

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm

https://www.gov.uk/guidance/register-and-use-the-vat-mini-one-stop-shop

 

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

@Margarete M wrote:

@Garnor M wrote:


Aggregate VAT amounts are reported when we submit our VAT payment to the EU via MOSS so we're not sending it with your personal information.

 


 Yes, however, Upwork has to record and store all names and addresses of the freelancers for 10 years and give access to this data to the European tax authorities on request.

 

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm

https://www.gov.uk/guidance/register-and-use-the-vat-mini-one-stop-shop

 


I'd like add that using a VAT ID this VAT ID will be always be reported together with the aggregated VAT amount for the individual VAT ID. So, with a VAT ID the individual will be immediately identifiable.

 

Therefore if freelancers want to carry on hding their income (comitting tax fraud) they should not apply for a VAT ID.

 

Generally speaking I am embarrassed  if not disgusted by the number of people openly admitting that they have been commiting tax fraud by ignoring/forgetting/not knowing about their obligation to pay this tax (and often other taxes to). What upsets me even more is number of people that would prefer carrying on doing this.

 

We've always been amazed at the number of lowballers. This explains at least part of the problem, they don't pay taxes!

Active Member
Bill T Member Since: Jul 16, 2015
84 of 316

If we are buying a service from a US-based company, then why wouldn't we pay the VAT of USA and instead we pay depending on our country's VAT? How is that logical? If I buy something from Germany I pay a VAT OF 19% no matter the fact that I live in Greece where VAT is 23%. 

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

@Bill T wrote:

If we are buying a service from a US-based company, then why wouldn't we pay the VAT of USA and instead we pay depending on our country's VAT? How is that logical? If I buy something from Germany I pay a VAT OF 19% no matter the fact that I live in Greece where VAT is 23%. 


Bill, you are located in Greece so according to EU regulations the Greek VAT has to be applied to you. If e.g. you import a car from the US you will also have to pay the Greek importation VAT. No difference, with Upwork you are importing a service. 

 

BTW that you pay German VAT if buying from Greece is about to change. January 1st, 2016. If revenue services can implement it in time, what was implemented for automated electronic services in January 2015 will be extended to cover all goods and services. As a general rule the VAT of the buyer's country of residence will have to be applied.

Active Member
Maksym S Member Since: Feb 18, 2015
86 of 316

Garnor M

Thanx for FAQ, it relly makes things clearer, but one question is still not answered:

 

Will we get copy of invoices that you sent to clients on our behalf in next 1-2 months?

 

It's very important, because we need to prepare tax reports soon.

i have 2 possibilities:

1) Create invoices to Upwork

2) Create invoice to clients myself.

Both are bad, 1st- because Upworks says it's intemediate, and i can't invoice it, 2nd - because clients already have invoices, so 2 invoices will exist for same service.

Community Guru
Evelina H Member Since: Jan 29, 2015
87 of 316

@Maksym S wrote:

Garnor M

Thanx for FAQ, it relly makes things clearer, but one question is still not answered:

 

Will we get copy of invoices that you sent to clients on our behalf in next 1-2 months?

 


 Actually Garnor already answered that question a page or two back and the answer is no, unfortunately.

Ace Contributor
Wim J Member Since: Nov 24, 2014
88 of 316

@Maksym S wrote:

Garnor M

Thanx for FAQ, it relly makes things clearer, but one question is still not answered:

 

Will we get copy of invoices that you sent to clients on our behalf in next 1-2 months?

 

It's very important, because we need to prepare tax reports soon.

i have 2 possibilities:

1) Create invoices to Upwork

2) Create invoice to clients myself.

Both are bad, 1st- because Upworks says it's intemediate, and i can't invoice it, 2nd - because clients already have invoices, so 2 invoices will exist for same service.


1) provide all your details as address in the invoice given to the client.

2)Add your VAT ID on the 2nd line of the address. It is not the best place, but hence, something you need to do.

3) ask your client to provide his VAT ID to Upwork, it will be automatic printed on your invoice to him/she.

4) ask your client a copy of the invoices he/she/company has downloaded from Upwork with your name on.

 

an 5) ask a discount to Upwork for doing there part of the service. And give half of it to your client, as he/she sends you the invoices.  Work is work and needs to be paid. "each hour work is each hour paid" is the motto,

not?

Active Member
Velin S Member Since: Sep 18, 2015
89 of 316

Nope, actually from New Year 2015 the VAT is charged according the place you buy from. I'm very mad of this too because now if I buy book from Amazon I pay 20% VAT but our german frind here pays 7% VAT instead because he is richer and can't affor lower taxes instead of us, poor east europeans who must pay high VAT!

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

@Velin S wrote:

Nope, actually from New Year 2015 the VAT is charged according the place you buy from. I'm very mad of this too because now if I buy book from Amazon I pay 20% VAT but our german frind here pays 7% VAT instead because he is richer and can't affor lower taxes instead of us, poor east europeans who must pay high VAT!


Velin,

 

This is only for automated electronic services. For everything not automated the old regulations remained valid. There are talks that what is now valid for automated electronic services will be expanded to all goods and services starting January 2016. 

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