What you need to know about the new EU tax law

[MichaelJ]

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.

[116e5a34]

If I have gotten payments and they were refunded and my balance is then once again 0€ income for this year. Is this then still sent to the tax authorities in EU?

[116e5a34]

Have been trying to get answers and help for two days and all they do is look at them and merge them but do not answer. For such a big platform they should at least offer quality support for the users!

[JoanneP]

Hi Nicolas,

Thanks for sharing more information. My name is Joanne, and I am responding on Arjay's behalf. Please know that I have requested the assistance of our team. One of our agents will assist you directly via a support ticket.

[dd054264]

Hello, I have a quick question. When should I receive the DAC7 form? I read many posts where it was written that it was until January 31st but I still didn't have anything. I'm from Poland. It's been a while and it's starting to worry me. Thank you for all your help

[JoanneP]

Hi Mateusz,

You will be notified when your DAC7 form is available for viewing and downloading. When it is ready, you can access it under Settings > Tax forms. For more information, please check out this page. 

[deborah-ponzio]

Direct and straightforward question: is the DAC7 form also reporting the $0.99 withdrawal fees? Y/N?

Upwork does not currently issue any invoices against them, but as far as I understand, still an invoice is required by the Italian tax regime to calculate and pay the VAT on those expenses.

If Upwork includes the withdrawal fees in the DAC7 forms, they will have to include the details of each invoice as well as we have to do as individual freelancers?

[deborah-ponzio]

I am posting this here as I got no response on the relevant thread in the bulletin board.

Direct and straightforward question: is the DAC7 form also reporting the $0.99 withdrawal fees? Y/N?

Upwork does not currently issue any invoices against such fees, but as far as I understand, still an invoice is required by the Italian tax regime to calculate and pay the VAT on those expenses.

Grateful for informed help from Support.

[LuiggiR]

Hi Deborah,

Thanks for your question. To better assist you, we’ve escalated your community post to a support ticket. One of our agents will be in touch with you soon.

[6bfcdaf8]

This is not only about DAC7. All of us have to report expenses and i use wire transfer which costs 30 dollars each. And i get no document in return, upwork says "our bank charges this",  That is correct, yet that doesn't mean you can't reflect that to me with an actual invoice. I'll be happy to see this get fixed.

[guntisenzo]

Hello, So due to new laws i started reporting my income to my company.

And how to properly handle taxes, like if my client is tax payer it shows "Reverse Charge" on invoice and if client is not tax payer then why client is not paying additional tax to payment and if they do why it does not show up on invoice?

Right now as i understand if i earn 100 USD from tax payer eu company i receive 90 USD after upwork fee 

If client is not tax payer i earn 100 USD, after  upwork fee it becomes 90 USD, i still additionally need to pay 21% VAT? even if i didn't receive money with VAT? 

It makes ZERO sense and makes payments be taxed twice, once from my side and once from client side 

[AveryO]

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.