What you need to know about the new EU tax law

[#1]

A new EU regulation known as DAC7 requires that digital platforms like Upwork collect and report tax information. Starting in 2023, the new law applies to freelancers and businesses based in the EU.

What is DAC7?

DAC7 requires digital platforms, such as online marketplaces, to share information about financial transactions with the governments in the EU countries where their customers or service providers have a tax residence. It ensures that digital services are tracked and reported to the proper tax authorities.

When will I get a DAC7 report?

For tax year 2023, your DAC7 report will be available starting January 31, 2024, in tax forms; we’ll email you when it’s ready.

Who is eligible to receive a DAC7 report?

If in 2023 you signed up with Upwork, had financial activity, and are located in an EU country, you’re eligible to receive a DAC7.

What information does DAC7 include?

DAC7 contains financial information about your activities on Upwork, including your 2023 net income, commissions, taxes, and transactions, which are sent to applicable governments in EU countries.

Need some help? Check out our FAQs or reach out to customer support.

[#2]

Hi Guntis, 

Any EU freelancer who provides services to a client in the same EU member state should consult their tax advisor to determine if the freelancer must send a VAT invoice separately to that client. 

If a freelancer and client both have VAT numbers but the client is operating in a different EU member state than the freelancer, Upwork will print "VAT Reverse Charged" on the invoice from the freelancer to the client so the client can self-assess VAT. If a client is in the same EU country as a freelancer or has no VAT number, we cannot apply a reverse charge to the client's invoice, and the freelancer will be responsible for self-assessing VAT and issuing the client an invoice.

I highly recommend reaching out to a local tax advisor so you can be assisted further with your tax questions.