Member Since: Apr 7, 2015
Starting March 1st, Upwork will begin charging VAT on our fees to freelancers and agencies in Belarus. A Value Added Tax law was introduced in Belarus which applies to fees charged for electronic services from non-Belarusian businesses (like Upwork) to Belarusian consumers.
If you are a freelancer or agency on Upwork who is operating as a separate legal entity in Belarus, Upwork will not charge you VAT. To confirm whether or not you are a legal entity, we will begin asking freelancers and agencies in Belarus to enter their Taxpayer Identification Number (TIN). We will be notifying all freelancers and agencies in Belarus via email. You will also see a notification when logging in.
- For freelancers and agencies that have entered a valid taxpayer identification number for the legal entity, Upwork will verify your TIN and will send you an email within 3 days letting you know if the information has been validated or declined. If validated, Upwork will not charge this tax and you will see “VAT Reverse Charged” on your invoice.
- For freelancers and agencies using Upwork as an individual entrepreneur and not for a legal entity, a 20% VAT will be applied to the fees we collect beginning March 1st (e.g. Upwork service fees, membership fees, or purchases of additional Connects). Per Belarusian law for digital services, the 20% VAT will be added to the applicable Upwork fees and will appear on your invoices as one bundled fee.
Here’s a simple example of how it would work, assuming the a 20% Upwork service fee:
|
Your contract amount |
$100.00 |
|
Upwork service fee (including VAT) Upwork’s service fee is $100 x 20% = $20 E-services VAT to be paid to the Belarus government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
|
Take-home earnings after service fees and VAT |
$76.00 |
In other words, considering the example above, the user will only be charged VAT on the $20 freelancer service fee, so 20% of $20 means they will be charged $4 for VAT. These amounts will appear on invoices and in your Transaction History and will be calculated in U.S. Dollars.
If you have questions regarding your tax obligations, please consult your tax advisor.
For more information on Upwork charging VAT, see this help article.
For more information on VAT laws in Belarus, see here.
Let us know if you have any additional questions.
Member Since: Oct 31, 2014
Hi Aleksandr and Igor, thanks for raising this question, this is definitely on our immediate roadmap.
Our team is working on updating the system and will be enabling VAT for customers located in Russia. We will be following up with an update once this goes live.
