The Government of India requires Upwork to deduct income-tax from the gross amount which includes service fees. That being said, since payments for Upwork's services are not subject to Indian withholding tax because Upwork's services are performed outside of India, you can deduct these expenses when filing your taxes. When filing a tax return with India, freelancers should report the Gross payment from their client as income, and then claim the services fees paid to Upwork as a deduction. Upwork, itself, pays taxes to the Indian Government on the services fees, remitting a 2% tax directly to the Indian government (under the recently enacted Equalisation Levy).
Hi , I am registered under Indian GST and have GSTIN.
As we know from 1st Oct,2020 Upwork charging TDS on Gross amount client pays.
Also we are paying service fees in USD and get separate invoice from transaction history section , do we need to pay GST on Service fees and membership fees paid by us to Upwork?
Before TDS , accounting was done as net off from what client pays and what we pay to upwork.
Before 1st Oct,2020 if client pays $100 , Upwork deduct $20 and we book revenue of $80.
Now after 1st Oct 2020 , Upwork charges TDS on Gross amount which is $100 that means , Indian Govt will get the reporting of income from Upwork as Mr. X was paid $100 and for that , TDS was charged $0.75.
Based on what upwork will show to Indian Govt as our turnover would be $100 coz they have deducted TDS on that. If we net off the charges paid on upwork then our turn over would be $80 which will be a mismatch in records. So if we show $100 as our turnover and shows $20 paid to upwork as Fees , it should be considered as import of services and will be liable to pay 18% GST on the same.
This is my understanding. Can you anyone please help if this accounting is correct or not?
As per your explanation, whatever Upwork charges as Service fee from freelancers, Upwork is paying 2% tax to the Indian Govt. Can we get a statement as to how much tax Upwork has paid for service fee earned from individual freelancer and where can we see this in our Upwork account.
Hi, I know upwork deducts extra $ if we don't add our Pan card or Adhaar card.
But I have added this from starting. But today I'm seeing upwork still deducts WHT fee from my earnings.
Any way to fix this? Or Should I start assuming that upwork now started charging more?
**Edited for Community Guidelines**
The amount of tax we are required to withhold is dependent upon whether or not you have a valid PAN or Aadhaar number on file with Upwork:
For Upwork users that have a PAN or Aadhaar on file, we are required to withhold 0.75% of client payments to users.
For Upwork users that do not have a PAN or Aadhaar on file, we are required to withhold 5.0% of client payments to users.