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Russian Freelancer Documentation for Wire Transfers

Active Member
Yuri L Member Since: Sep 17, 2016
51 of 218

Upwork provides services on the US territory, russian taxes cannot apply there.

Perhaps freelancer's services are eligable to this tax, but I am not sure about that. Individual enterpreneurs that use simplified taxes system are not required to pay it. For other cases I suppose you need to check laws, for example here:

Active Member
Andrey S Member Since: May 7, 2015
52 of 218

Sorry, but you are wrong. According to Russian law and new form of contract, Upwork fee will be treated as our income. Moreover, we will should pay NDS even if simplified system of taxation is used. You can find details here:

Active Member
Yuri L Member Since: Sep 17, 2016
53 of 218

But that article is specifically about purchasing goods and services from foreign providers, not about selling them. Our income is from selling services. If you mean purchasing Upwork services, which is covered in section 3.2 of contract, those services are provided on the US territory, and that article also specifically states that place of realization is Russian Federation. We do not send money to Upwork, their pay never gets in Russia. There is also section 3.6 where Upworks seems to take responsibility to pay extra taxes. 

I've also noticed in the contract that we are supposed to provide notarially approved copies of documents 'promptly'. So what, do we need to approve and send paper copies somewhere? I'd like some explanation on that.


UPD. Besides, now that I think of it, place of implementation is actually the client's country, this makes sense, because results are delivered to the client, which is what act of acceptance confirms. That article also states that when you purchase services from foreign contactors, place of implementation is Russia, not the contractor's country.

Active Member
Andrey S Member Since: May 7, 2015
54 of 218

Unfortunately, you are using Upwork on territory of Russian Federation, so it will be hard to say that service was provided on US territory only. There is no mention in new contract about it. It will be good to add it, of course, but I am not sure that Upwork will do it.


P. 3.6 of new contract says us that if Upwork will need to pay any Russian taxes then Upwork will substract more money from our income to compensate it.


I agree that we will not pay Upwork from bank account, but new act clearly show that Upwork got fee from our income. According to Russian law any payment to foreign company should pass currency control. It is violation of law.


I hope that Upwork will cancel new documents. If not, I hope that Upwork at least will think not only how freelancer will get payment in bank, but also about removing conflicts with Russian law from agreement and act.

Active Member
Yuri L Member Since: Sep 17, 2016
55 of 218

At least software development is assigned to client's country, so it only considered accomplished in Russia, if client makes business in Russia. So we don't have to collect NDS for him if he doesn't. You can read this in Tax Code, p.148/4.

Paying to Upwork is another thing though, they should state that they are collecting commission as client's agent.

Active Member
Andrey S Member Since: May 7, 2015
56 of 218

Of course, Freelancer should pay NDS only for Upwork fee.


Personally, I think it is completely bad idea to mix relationship between Upwork and freelancer for pay earnings and for pay comission in one agreement. Bank is not interested to know something about comission. Bank is interested to be sure that received money is legal money and we didn't kill something to earn it Smiley Happy

Ace Contributor
Ilya S Member Since: Jun 22, 2015
57 of 218

Another "good" news for everybody:



On 26th September upwork will automatically send all money to the default bank account for those who has more than 1000$ and has chosen quarterly schedule.


Since that date we'll have 14 days to provide all the docs to our banks, otherwise we'll violate the law and will have big problems.


So UPWORK PLEASE DO SOMETHING ASAP otherwise many Russian workers will get huge problems very soon!

Active Member
Alexey S Member Since: Jun 2, 2016
58 of 218

Ilya S, it's good that you've found bugs and typos in UpWork documents. But I don't think you (or anyone of us) should fix that errors. This just shows how bad these docs are done. I think UpWork should get back to old documents (with signing it by request) OR support both old and new ones AND, of course, consult with Russian legal experts before implement some changes.

Valeria K Moderator Member Since: Mar 6, 2014
59 of 218

Hi All,


The Russian Federation doesn't have a VAT (NDS) charge for ESS (Electronically supplied services). Therefore, the service fee shouldn't be applicable for VAT (NDS).


We'll be providing more detailed responses to your questions as well as updated forms soon.


Additionally, note that posting in a language other than English is against the Community Guidelines so a couple of posts have been removed from the thread.

~ Valeria
Ace Contributor
Anna L Member Since: Nov 24, 2014
60 of 218

Valeria, even if your interpretation of Russian laws is correct, VAT will become applicable starting from January 1 2017 (in 3 months).