Re: Name on a received invoice? - Page 8

Quang N · ‎06-30-2015

I have a quick question on the invoices you receive from Upwork. As a client, when receiving an invoice from Upwork whose name and address is shown on that invoice? Is it Upwork itself or is it the name and address of the freelancer that was hired by you? So who are you paying according to the invoice, Upwork or the freelancer?

Joachim M · ‎10-25-2015

@Egor S wrote:
@Joachim M wrote:
@Egor S wrote:
Hi Joachim,

Thank you for your informative posts. You mentioned in your previous posts that elance provides enough documents / information in case both parties are from EU. What are the process and applicable taxes (if freelancer and client do their business via elance) in case the client is outside of EU (the USA for example) and freelance is from EU (Germany for example)?
Hi Egor, with the freelancer in Europe and the client in the US (or any other country not member of the EU) no VAT is to be charged. On Elance most clients allow for their full address to be displayed on the invoice issued by Elance. I have to say most, as Elance does permit clients to hide their details and only their handle to be displayed. At the start of a fixed price job you can view the proforma invoice issued for the funding of escrow. If the information displayed doesn't suffice you can ask your client to provide all necessary details (the full address is sufficient).

Problem is, Elance is being wound down, no new clients can register and soon now new jobs can be posted.
Kek, what we are supposed to do when elance will be closed? 😕

I'm doing the same Margarete suggested, write my own invoices. At present I simply quote including VAT and tell the client I can reduce the price accordingly if he either provides his VAT ID incl. address (resident in an EU member state) or only his full address (resident outside the EU). I don't check the address if outside the EU and if within the EU I merely check the VAT ID provided with VIES. I turn down jobs from EU members without VAT ID as I would then have to charge VAT and (possibly starting January) pay it in the client's country of residence. A no go for me, I'm not going to deal with 28 different tax offices.

Anonymous-User A · ‎10-25-2015

@Joachim M wrote:

I'm doing the same Margarete suggested, write my own invoices. At present I simply quote including VAT and tell the client I can reduce the price accordingly if he either provides his VAT ID incl. address (resident in an EU member state) or only his full address (resident outside the EU). I don't check the address if outside the EU and if within the EU I merely check the VAT ID provided with VIES. I turn down jobs from EU members without VAT ID as I would then have to charge VAT and (possibly starting January) pay it in the client's country of residence. A no go for me, I'm not going to deal with 28 different tax offices.

To be honest, I mainly follow Joachim's advice. He explained before how he handles the invoice problem. In the beginning I had absolutely no idea how to behave. At the end of the day we will see if the tax authorities will be happy with this solution. However, as Upwork charges the invoice to the client, I think there should be a remark on the invoice that it has already been paid to Upwork?? How do you handle this, Joachim?

Egor S · ‎10-25-2015

Hi Margarete and Joachim, thank you for your answers. Just one more question appeared in my mind. In what currency (dollars or euro) do you issue invoices?

Anonymous-User A · ‎10-25-2015

@Egor S wrote:
Hi Margarete and Joachim, thank you for your answers. Just one more question appeared in my mind. In what currency (dollars or euro) do you issue invoices?

Egor, in my case the bid was in USD, the client from UK had to pay USD, in my invoice I converted USD in EUR and added to the invoice that the amount already had been paid. I do not know, if this is the best way to deal with the invoice and so I do not recommend anybody to do the same.

Joachim M · ‎10-26-2015

@Egor S wrote:
Hi Margarete and Joachim, thank you for your answers. Just one more question appeared in my mind. In what currency (dollars or euro) do you issue invoices?

The bid being in US$ I invoice in US$. Direct clients, outside of Upwork, I invoice in either Euro, US$ or GBP (UK clients). This will be agreed with the client beforehand. All direct clients resident in the EU pay by bank transfer anyway, it's the cheapest way. Everybody else pays by PayPal or Skrill.

Joachim M · ‎10-26-2015

@Margarete M wrote:
To be honest, I mainly follow Joachim's advice. He explained before how he handles the invoice problem. In the beginning I had absolutely no idea how to behave. At the end of the day we will see if the tax authorities will be happy with this solution. However, as Upwork charges the invoice to the client, I think there should be a remark on the invoice that it has already been paid to Upwork?? How do you handle this, Joachim?

Well, normally my invoice shows my bank account and the email address for PayPal and Skrill, all of it in the footer. For payments via Upwork I just add a single line right below the final amount: Payment via Upwork/Elance Escrow Service. That's it. It is anyway is transferred from Upwork to my PayPal account and from there to my bank account. I honestly doubt that I will ever be inspected anyway.

And if anybody thinks all of this is far too complicated with Upwork, well, why not found a small business in Belize. Everything you earn beyond the borders of Belize is tax free and if the income is sufficiently high you can get a nomal credit card from your bank there.

Wim J · ‎11-02-2015

Well, normally my invoice shows my bank account and the email address for PayPal and Skrill, all of it in the footer. For payments via Upwork I just add a single line right below the final amount: Payment via Upwork/Elance Escrow Service. That's it. It is anyway is transferred from Upwork to my PayPal account and from there to my bank account. I honestly doubt that I will ever be inspected anyway.

And if anybody thinks all of this is far too complicated with Upwork, well, why not found a small business in Belize. Everything you earn beyond the borders of Belize is tax free and if the income is sufficiently high you can get a nomal credit card from your bank there.

It should be this: (or just the link to Upwork Terms & Conditions:

Now is mentioned "REMIT TO.... the address of Upwork"
Here should be written "remit to Elance Escrow Corporation followed by the address of this company:
Company No: C3049380
Street 441 Logue Ave.
Town: Mountain View, CA 94043
Country: United States
for good understanding, a reference to the TERMS & CONDITIONS with the URL to it.
a part of that clause that explains the 3 way situation : clients pays to Elance as escrow that forwards the 100% to the escrow account of the freelancer and automatic deducts the 10% commission and forward that 10% commission to Upwork. (as that is the way it works now)
4.1 ESCROW ACCOUNTS: (of https://www.upwork.com/info/terms/ user agreement)
Upwork Affiliate, Elance Escrow Corporation ("EEC"), provides Escrow Services to Clients and Freelancers to deliver, hold, or receive payment for an Engagement, and to make payments to Upwork. EEC is a licensed Internet escrow agent and holds California Department of Business Oversight License No. 963 5086. The Escrow Services are intended for business use, so you agree to use the Escrow Services for business purposes
5. CONTRACTUAL RELATIONSHIP BETWEEN CLIENT AND FREELANCER 5.1 Service Contracts https://www.upwork.com/info/terms/
You acknowledge and agree that when a Freelancer accepts an Engagement awarded by a Client, the Client and the Freelancer will be deemed to have entered into a Service Contract with each other
6. PAYMENT TERMS 6.1 Service Fee: https://www.upwork.com/info/terms/
When a Client pays a Freelancer, or when funds related to an Engagement are otherwise released to a Freelancer as required by the applicable Escrow Instructions, EEC will credit the Freelancer Escrow Account and then deduct and disburse to Upwork a 10% service fee that Upwork earns and Freelancer agrees to pay Upwork for creating, hosting, maintaining, and providing the Site and Site Services (the "Service Fee"). If Freelancer elects disbursement in foreign currency, EEC will add Upwork's conversion fee of 1.5% to the spot rate quoted by its foreign exchange vendor and credit that amount to Upwork.

Wim J · ‎11-02-2015

@Margarete M wrote:
To be honest, I mainly follow Joachim's advice. He explained before how he handles the invoice problem. In the beginning I had absolutely no idea how to behave. At the end of the day we will see if the tax authorities will be happy with this solution. However, as Upwork charges the invoice to the client, I think there should be a remark on the invoice that it has already been paid to Upwork?? How do you handle this, Joachim?

As I mentioned in my earlier post; the way of payment to the escrow service Elance should be written on the invoice given to the client in the freelancers name.

If you make your own, look to my post and just copy the text. You can read there who is the 3rd party escrow company clients pay to and you receive from.

Wim J · ‎11-02-2015

I'm doing the same Margarete suggested, write my own invoices. At present I simply quote including VAT and tell the client I can reduce the price accordingly if he either provides his VAT ID incl. address (resident in an EU member state) or only his full address (resident outside the EU). I don't check the address if outside the EU and if within the EU I merely check the VAT ID provided with VIES. I turn down jobs from EU members without VAT ID as I would then have to charge VAT and (possibly starting January) pay it in the client's country of residence. A no go for me, I'm not going to deal with 28 different tax offices.

I totally agree, and for that reason, you will see Upwork will come ith a system that allows the freelancer and the client both to show each VAT ID.

Europe is a big market for them, not just one Country they can ignore.

Joachim M · ‎10-28-2015

Today I received the following email from Upwork:

Quote

Hi Joachim,

To better support our local markets, Upwork is introducing VAT charges for Upwork service fees, memberships and additional Connects. Please enter your VAT number on Upwork by November 30th, 2015 to avoid VAT charges by Upwork.

If a VAT number is not entered, we will automatically calculate and apply your country-specific VAT to the Upwork service fee, memberships and additional Connects after November 30th.

If you have entered a valid VAT number, VAT will not be charged and you’ll simply see “VAT Reverse Charged” on your invoice.
Separately, if your client also has a VAT number and is located in a different EU country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client.
If you provide services to a client in the same EU member state, you should consult your tax advisor to determine if you must separately send a VAT invoice to your client.

If you do not have a VAT number, you can continue working on Upwork as usual. The only change is that VAT will be charged on the Upwork service fee, memberships and additional Connects and appear in your transaction history.

Enter your VAT number today.

Unquote

No word about whether we as freelancers will now receive a legal copy of the invoice sent to the client on our behalf, no word on us receiving the client's VAT ID. What will happen? The client will file a report with our VAT ID. We can't file a report with the clients' VAT IDs, hence the cross checking by the various revenue services will sound the alarm bells. A sure way to see the tax inspector on your doorstep 😞

Anonymous-User A · ‎10-28-2015

@Joachim M wrote:
Today I received the following email from Upwork:

Quote

Hi Joachim,
To better support our local markets, Upwork is introducing VAT charges for Upwork service fees, memberships and additional Connects. Please enter your VAT number on Upwork by November 30th, 2015 to avoid VAT charges by Upwork.
If a VAT number is not entered, we will automatically calculate and apply your country-specific VAT to the Upwork service fee, memberships and additional Connects after November 30th.
If you have entered a valid VAT number, VAT will not be charged and you’ll simply see “VAT Reverse Charged” on your invoice.
Separately, if your client also has a VAT number and is located in a different EU country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client.
If you provide services to a client in the same EU member state, you should consult your tax advisor to determine if you must separately send a VAT invoice to your client.
If you do not have a VAT number, you can continue working on Upwork as usual. The only change is that VAT will be charged on the Upwork service fee, memberships and additional Connects and appear in your transaction history.
Enter your VAT number today.

Unquote

No word about whether we as freelancers will now receive a legal copy of the invoice sent to the client on our behalf, no word on us receiving the client's VAT ID. What will happen? The client will file a report with our VAT ID. We can't file a report with the clients' VAT IDs, hence the cross checking by the various revenue services will sound the alarm bells. A sure way to see the tax inspector on your doorstep 😞
_______________________________________________________________________________________

1. Reverse Charge has to approved in each case and cannot just be applied automatically.

2. It is mentioned that Upwork is sending an invoice from us to the client. That is new. It is our invoice but we do not see it?

Joachim M · ‎10-29-2015

@Margarete M wrote:
2. It is mentioned that Upwork is sending an invoice from us to the client. That is new. It is our invoice but we do not see it?

That's not new. Upwork is doing this all the time. Problems were the invoices didn't display the freelancers details and they were not compliant with EU regulations. It looks like Upwork is now at least addressing the clients' problems in parts.

Wim J · ‎11-02-2015

_______________________________________________________________________________________

1. Reverse Charge has to approved in each case and cannot just be applied automatically.
2. It is mentioned that Upwork is sending an invoice from us to the client. That is new. It is our invoice but we do not see it?

NEW?

I am telling you that already for weeks. You did not believed me then?

Anonymous-User A · ‎11-02-2015

@Wim J wrote:
_______________________________________________________________________________________
1. Reverse Charge has to approved in each case and cannot just be applied automatically.
2. It is mentioned that Upwork is sending an invoice from us to the client. That is new. It is our invoice but we do not see it?
NEW?

I am telling you that already for weeks. You did not believed me then?

Wim, I believe you. They send an invoice with my name but I am not the sender of the invoice. The sender is probabely Upwork.

Joachim M · ‎11-03-2015

@Margarete M wrote:
@Wim J wrote:
_______________________________________________________________________________________
1. Reverse Charge has to approved in each case and cannot just be applied automatically.
2. It is mentioned that Upwork is sending an invoice from us to the client. That is new. It is our invoice but we do not see it?
NEW?

I am telling you that already for weeks. You did not believed me then?
Wim, I believe you. They send an invoice with my name but I am not the sender of the invoice. The sender is probabely Upwork.

The sender is Upwork but they do it in your name i.e. your name and address is supposed to appear on it.

Wim J · ‎11-02-2015

@Joachim M wrote:
Today I received the following email from Upwork:

Quote

Hi Joachim,
To better support our local markets, Upwork is introducing VAT charges for Upwork service fees, memberships and additional Connects. Please enter your VAT number on Upwork by November 30th, 2015 to avoid VAT charges by Upwork.
If a VAT number is not entered, we will automatically calculate and apply your country-specific VAT to the Upwork service fee, memberships and additional Connects after November 30th.
If you have entered a valid VAT number, VAT will not be charged and you’ll simply see “VAT Reverse Charged” on your invoice.
Separately, if your client also has a VAT number and is located in a different EU country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client.
If you provide services to a client in the same EU member state, you should consult your tax advisor to determine if you must separately send a VAT invoice to your client.
If you do not have a VAT number, you can continue working on Upwork as usual. The only change is that VAT will be charged on the Upwork service fee, memberships and additional Connects and appear in your transaction history.
Enter your VAT number today.

Unquote

No word about whether we as freelancers will now receive a legal copy of the invoice sent to the client on our behalf, no word on us receiving the client's VAT ID. What will happen? The client will file a report with our VAT ID. We can't file a report with the clients' VAT IDs, hence the cross checking by the various revenue services will sound the alarm bells. A sure way to see the tax inspector on your doorstep 😞

Yep Joachim, as I told you some weeks ago. Upwork will start working with your VAT to cover there back. And yes, they will need to start charging VAT in the EU.

But if I see VAT reverse charge on my invoices give in the name of the freelancer.

UPWORK, I really need to see also the valid VAT ID of the freelancer.

If not, we as clients will get in big trouble, buying without VAT of a person or business we have not there VAT printed on the invoice.

Remeber Joachim, your client can alsways sent you the copies he downloaded. Yes it is extra work and Upwork should do it automatic.

Valeria K · ‎10-28-2015

The e-mail was referring to VAT assessed on Upwork services - the 10% service fee, memberships and connects. This is not referring to VAT assessed for your services with clients.

Maksym S · ‎10-28-2015

The email says different:

Separately, if your client also has a VAT number and is located in a different EU country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client.

And the most important thing, How can I get the copies of invoices that were sent to clients from "me" by Upwork???

Steven S · ‎10-28-2015

From the mail:

"Separately, if your client also has a VAT number and is located in a different EU country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client."

And:

"If you provide services to a client in the same EU member state, you should consult your tax advisor to determine if you must separately send a VAT invoice to your client.".

Except, the information I get from Upwork doesn't really help me to identify the client in such a way that I can also send him or her an invoice. There isn't even an address.

Joachim M · ‎10-29-2015

@Lena E wrote:
The e-mail was referring to VAT assessed on Upwork services - the 10% service fee, memberships and connects. This is not referring to VAT assessed for your services with clients.

Lena, this is not correct. You may want to reread the email you sent.

This sadly reminds me of the topic IRS. Upwork immediately said that Upwork is complying to IRS regulations in full. That was never questioned. The question was is Upwork providing everything necessary that clients and freelancers can comply with the IRS. Upwork communication stopped at that point. Now we have a nearly identical situation. Upwork will comply with EU regulations. But, will Upwork provide all necessary data and files for freelancers and clients to comply? So far the answer is clearly no.

Wim J · ‎11-02-2015

@Lena E wrote:
The e-mail was referring to VAT assessed on Upwork services - the 10% service fee, memberships and connects. This is not referring to VAT assessed for your services with clients.

thanks Lena,

I can see that Upwork covers there back as I predicted some weeks a go.

But please take note, yes you are charging the freelancer. And yes all the income Upwork earns are paid by the freelancer.

but the start of all that money comes from the client.

If business clients start to get trouble with invoices printed on "VAT Reverse Charged"

but no VAT ID at all of the freelancer is written on that.

What means the client is evading VAT, criminal charges are on that.

The accountant department of the clients will advice to stop spending on Upwork. At least in the EU. And big parts of the money flow will dry up.

= No work for the freelancers, no commissions to charge on.

Some geographical lessons:

we are with 508 million people and 28 member states.

https://en.wikipedia.org/wiki/Demographics_of_the_European_Union

That are a lot of potential clients to miss out.

Please, look also to the clients that keep this business running. It is a great business model, but if the law starts to forbit us, there is no way then to follow it. Even if we like it a lot.

Edgar F · ‎10-29-2015

Hey all,

So I have a similar situation - please tell me if possible - is that the same it's being dealed with above. I have read a few pages, but seems like most of the people having issues are the ones who already have VAT number.

So the thing is that in my country (Lithuania) once you reach 45 000 euros of income during last 12 months you must become a VAT payer. However, I think that I found out that if you are receiving money from countries outside Lithuania - this doesn't count.

In my situation I have clients only from abroad (even outside EU). So logically, I know that all clients are not from EU, but how do I create invoices? If I Invoice Upwork, then logically I could even had Lithuanian clients pay me through there and I would "get away from VAT counter".

However, if I want to invoice clients - then I don't have enough information anywhere on Upwokr. I just had a person to hire me and I did him consulting work = how do I find his details? Upwork provided me with work for which I got paid from.

Regards,

Edgar

Joachim M · ‎10-29-2015

@Edgar F wrote:
Hey all,

So I have a similar situation - please tell me if possible - is that the same it's being dealed with above. I have read a few pages, but seems like most of the people having issues are the ones who already have VAT number.

So the thing is that in my country (Lithuania) once you reach 45 000 euros of income during last 12 months you must become a VAT payer. However, I think that I found out that if you are receiving money from countries outside Lithuania - this doesn't count.

In my situation I have clients only from abroad (even outside EU). So logically, I know that all clients are not from EU, but how do I create invoices? If I Invoice Upwork, then logically I could even had Lithuanian clients pay me through there and I would "get away from VAT counter".

However, if I want to invoice clients - then I don't have enough information anywhere on Upwokr. I just had a person to hire me and I did him consulting work = how do I find his details? Upwork provided me with work for which I got paid from.

Regards,
Edgar

Edgar, if your clients are outside the EU you don't charge VAT. If your clients are within the EU you don't charge VAT if you and your client both have a VAT ID. If you/or your client don't have a VAT ID you charge the VAT of your clients country of residence and have to pay it to the tax office in your client country of residence. For imports you pay importation VAT or are charged VAT by the seller (in this case Upwork is the seller) and you either have to pay importation VAT or are being charged VAT by Upwork for the services they provide (fee and commission). Every European business (as y freelancer you are a business) has always been under the obligation to pay importation VAT.

For these services Upwork is already providing a correct invoice. If you have a VAT ID Upwork won't charge VAT to you, you still have to file for importation VAT.

Naturally Upwork is under the obligation to give us access to the invoices they issue on our behalf to the client.

Edgar F · ‎10-29-2015

Hi Joachim,

This is some really useful information. Thank you. Just to be sure:

"If you/or your client don't have a VAT ID you charge the VAT of your clients country of residence and have to pay it to the tax office in your client country of residence." - this is only applied if we are both in Europe. Righ?

If I am in EU and my clients are not - I don't have to worry about VAT at all? In that case - how do I prove that my clients are not from EU?

Joachim M · ‎10-29-2015

@Edgar F wrote:
Hi Joachim,

This is some really useful information. Thank you. Just to be sure:
"If you/or your client don't have a VAT ID you charge the VAT of your clients country of residence and have to pay it to the tax office in your client country of residence." - this is only applied if we are both in Europe. Righ?

Right. This is why I'm no longer taking on clients from Europe without VAT ID. On Upwork I don't care at present, as I don't know who the client is and where the client is resident. After talking to my revenue service I simply treat the turnover on Upwork as turnover within Germany and thus it includes 19 % VAT (which I have to pay). Most clients from Europe have a VAT ID and have no problem providing their address and VAT ID, I then write an invoice to them showing both VAT IDs and both of us can file the necessary report.

If I am in EU and my clients are not - I don't have to worry about VAT at all? In that case - how do I prove that my clients are not from EU?

You are right on both. Upwork will have to give us access to the invoices they issue on our behalf. Until then, ask the client for his address and issue your own invoice (for your files only if the client is located outside the EU)