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quankiquanki
Community Member

Name on a received invoice?

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?

237 REPLIES 237
kugrin
Community Member


@Garnor M wrote:

Hi Gabriele and others,

We are revisiting this and plan to make updates to the invoices in the coming months. As part of this, we're continuing to share your feedback to the product team so they're aware of your needs. To be clear however, we are not making any changes to this right away.


Garnor, you guys changed 2014 and early 2015 invoices to Upwork without any warning when in 2014 and early 2015 this company was called oDesk and was located at a different address. This has serious ramifications for us, your loyal, paying, users.

 

Is it really sound business practice to issue invoices under a business name and address that did not exist at the time of the invoiced service?

88cc0fc9
Community Member

thank you Garnor for the answer.

i really hope that the changes you're planning are in the direction to have a FULLY COMPLIANT invoice, also for eu markets.

 

without that, no eu company can do steady business here, and if i'll be forced to make my freelancer do a compliant invoice by himself, i'll obviosuly be forced to pay him thourght different channels, also skipping your fee.

 

but this is not my intention, and probably is not yours, but you should understand that is clearly the natural end if this situation is not going to resolve.

 

jmeyn
Community Member


@Gabriele D wrote:

thank you Garnor for the answer.

i really hope that the changes you're planning are in the direction to have a FULLY COMPLIANT invoice, also for eu markets.

 

without that, no eu company can do steady business here, and if i'll be forced to make my freelancer do a compliant invoice by himself, i'll obviosuly be forced to pay him thourght different channels, also skipping your fee.

 

but this is not my intention, and probably is not yours, but you should understand that is clearly the natural end if this situation is not going to resolve.

 


That's exactly what will happen. Regular clients of mine are sticking to Elance after I warned them that if they move the jobs to Upwork they won't receive an EU compliant invoice and they will have to pay 19% more as I'm forced to raise my price by the VAT I have to pay for jobs done on Upwork. 


@Garnor M wrote:

Hi Gabriele and others,

We are revisiting this and plan to make updates to the invoices in the coming months. As part of this, we're continuing to share your feedback to the product team so they're aware of your needs. To be clear however, we are not making any changes to this right away.


 KTHXBYE

 

...is all I could write in this case. This means I'm done with Upwork. I was hoping you would revert to the old invoice format for the time being, until you have everything figured out. Good luck, send us a newsletter once you're ready.

Wow, I was not aware of this.

I'm switching to something else, this is ridiculous--anyone know of a good place for freelance translation services with REAL invoices? Besides ProZ--something for which I could pay hourly like oDesk.


@Garnor M wrote:

Hi Gabriele and others,

We are revisiting this and plan to make updates to the invoices in the coming months. As part of this, we're continuing to share your feedback to the product team so they're aware of your needs. To be clear however, we are not making any changes to this right away.

Edited: The ToS have remained the same with regard to this. My bad for not reading them closely enough before.

Well, the product team along with the lawyers have listened and made a decision - and much sooner than expected! Yay.

 

Nothing was changed with the recent update: no formal invoices. Not their responsibility.

 

I better start charging clients more to make up for the time spent writing invoices and contacting and emailing them...

And good luck with getting proper contact details for clients that stopped communicating months ago. Or left the platform. Or the ones that don't want you to invoice them. Or...

 

This is a really low blow.

e407b0fa
Community Member

It seems that Upwork now issues two invoices:

First one is from Upwork Inc company for depositing the fixed amount to the Upwork account and the Second one is from the name of Freelancer.

anton, where you saw these two invoices? on my side i still get only one: the non-compliant one we're discussing here

On Fixed-time jobs.

88cc0fc9
Community Member

downloaded the invoices of the last week, unlukily still no changes, still the new, unusable ones.

 

meanwhile, i've investigated other opportunities to solve the issue, and basically are all outside of odesk. And that is not really my intention, but is going to be the only option to manage big weekly spending, in a EU-compliant manner.

 

someone can think about moving long-term partners (the ones who do the major part of the hours) on other generic platforms that allows screenshot tracking and paypal payment (search "time tracking with screenshot"), and get direct invoices from them for the paid amount

 

really hope odesk can do a step back (or forward...) quickly. more quickly that the "months" said

fondamenta
Community Member

I realize I'm not the only one with invoice problems ๐Ÿ™‚

 

https://community.upwork.com/t5/Clients/Difficult-to-prove-Upwork-charges-for-bookkeeping/m-p/103679...

 

 

suznee
Community Member

Upwork has made it very clean in the updated ToS how they will handle invoices.

 

6.7 Formal Invoices and Taxes

Upwork will have no responsibility for determining the necessity of or for issuing any formal invoices, or for determining, remitting, or withholding any taxes applicable to the Freelancer Fees. Freelancer will be solely responsible for determining whether it is required by applicable law to issue any formal invoices for the Freelancer Fees and for issuing any invoices so required. Freelancer will also be solely responsible for determining whether: (a) Freelancer or Upwork is required by applicable law to remit to the appropriate authorities any value added tax or any other taxes or similar charges applicable to the Freelancer Fees and remitting any such taxes or charges to the appropriate authorities on behalf of itself or Upwork, as appropriate; and (b) Upwork is required by applicable law to withhold any amount of the Freelancer Fees and for notifying Upwork of any such requirement and indemnifying Upwork (either by Upwork, at our sole discretion, offsetting the relevant amount against a future payment of Freelancer Fees to Freelancer or Freelancer reimbursing Upwork for the applicable amount) for any requirement to pay any withholding amount to the appropriate authorities (including penalties and interest). In the event of an audit of Upwork, Freelancer agrees to promptly cooperate with Upwork and provide copies of Freelancerโ€™s tax returns and other documents as may be reasonably requested for purposes of such audit, including but not limited to records showing Freelancer is engaging in an independent business as represented to Upwork.

 

https://www.upwork.com/info/terms/newterms/

jmeyn
Community Member


@Suzanne N wrote:

Upwork has made it very clean in the updated ToS how they will handle invoices.

 

6.7 Formal Invoices and Taxes

Upwork will have no responsibility for determining the necessity of or for issuing any formal invoices, or for determining, remitting, or withholding any taxes applicable to the Freelancer Fees. Freelancer will be solely responsible for determining whether it is required by applicable law to issue any formal invoices for the Freelancer Fees and for issuing any invoices so required. Freelancer will also be solely responsible for determining whether: (a) Freelancer or Upwork is required by applicable law to remit to the appropriate authorities any value added tax or any other taxes or similar charges applicable to the Freelancer Fees and remitting any such taxes or charges to the appropriate authorities on behalf of itself or Upwork, as appropriate; and (b) Upwork is required by applicable law to withhold any amount of the Freelancer Fees and for notifying Upwork of any such requirement and indemnifying Upwork (either by Upwork, at our sole discretion, offsetting the relevant amount against a future payment of Freelancer Fees to Freelancer or Freelancer reimbursing Upwork for the applicable amount) for any requirement to pay any withholding amount to the appropriate authorities (including penalties and interest). In the event of an audit of Upwork, Freelancer agrees to promptly cooperate with Upwork and provide copies of Freelancerโ€™s tax returns and other documents as may be reasonably requested for purposes of such audit, including but not limited to records showing Freelancer is engaging in an independent business as represented to Upwork.

 

https://www.upwork.com/info/terms/newterms/


Well this clearly shows that Upwork hasn't comprehended the concept of VAT and and what the invoices they are issuing on behalf of the freelancer to the client have to look like. 

jmeyn
Community Member

This does raise the question of how interested is Upwork in freelancers and clients from Europe.

88cc0fc9
Community Member

they are crazy. they will end forcing all the european client to use this site just for scouting, and then managin relationships and billed hours out of the platform. i already know a lot of people who has started doing this, and i'm on the route to. i still cannot understand how is possible to do a change like that, that cuts out entire europe book-keepi g rules

Hi Everyone,

 

We will be making changes soon so that invoices are compliant with EU laws.

 

-Lena

Untitled

Thanks, Lena!

Well, that is really good news.

 

good news, lets see for the real outcome

Anonymous-User
Not applicable

Hi Lena,

When can we expect these changes?

All the best,

Margarete

Still waiting and waiting.

I have to hire in september some new freelancers but this way it is not going to happen.

bcb55899
Community Member

5 days I'm waiting for an issue before getting start with upwork... or jumping to an other one...

Thanks for your positive issue for EU companies.

88cc0fc9
Community Member

any forecast about this?

Anonymous-User
Not applicable

Silence more than two weeks now...

i feel that the decreased number of people posting in this discussion is directly related by the decreased hope for a win win solution. As told, scouting here, and awarding otherwhere, will be the most adopted solution by anyone has a continuative relationship with a developer. and this is stupid, cause are exactly the kind of relationship that generate more $ volume 

Anonymous-User
Not applicable

Maybe. But there is another reason: All communication with Upwork seems to be asymmetrical. Always announcements of changes people do not like and in regard of this topic "invoices" the company has stopped communicating weeks ago and maybe even stopped listening.

kugrin
Community Member

Lena, can you please update us? It's now September.

Hi Krisztina and others,

 

The update for invoices is about to be implemented. It's been delayed due to certain issues. Rest assured, however, that the team is working to make sure it's fixed as soon as possible.

~ Valeria
Upwork

There was a lot of written about who is the client, the buyer and the seller, with references to the terms and conditions of the Upwork service. But the ToS are probably irrelevant, as the reality is completely different. Let me present my point of view:

 

1. A tax review will check if invoices and bank transfers match. As a freelancer, all my bank transferes are on behalf of Upwork (not the client). As a result, If I make-up an invoice to a client, it has nothing to do with the real money transfer, both in terms of amount and name, and will create a lot of problems with the tax authorities. Conclusion: I will issue an invoice where Upwork is my client. And I will have to pay a VAT on this amount, as I am based in EU and Upwork is based in US. 

 

2. For this invoice I need the tax number of Upwork. After long exchange of mails, finally I have a California tax ID, which is not the same as the IRS tax ID; still I have official communication with Upwork to show and Tax ID to put on my invoices.

 

3. If I decide to declare the full value of the contract with the client and reducie it with the fee paid to Upwork, I will have to present an invoice issued by Upwork to me. This has never happen, so it will not be accounted as a cost, As a result, in reality, Upwork is not a service provider to me, it is my client that resells my services to the clients. I guess any judge will take this decision based on the real flow of money and documents (or lack of documents). And in this case Upwork will have to pay VAT on ALL services sold through its platform, not only on the 10% fee charged. And this may ruin it completely. . 

 

4, I will only appreciate if Upwork can get valid EU company registration with tax ID. Under EU rules, export of services is VAT free (if the client is registered with EU databse for intracommunity services) and I shall not charge VAT on my invloces to Upwork. It will not matter where my clients are based, as in reality my client is Upwork - they are the guys that pay me and that never issue an invoice for the 10% feen (I mean, legal invoice, both with my name, address and tax id, as well as with its name, address, tax id, service amount, vat charged (or not), etc.)

 

 

Anonymous-User
Not applicable

Todor, I do not know in which European country you live. If we send invoices from Germany to a client in US this is not taxable and therefore without VAT. If Upwork would have a European base and be obligded to pay taxes in Europe than invoices send to Upwork would be added by 19% VAT.

In specific cases you may be eligible to do reverse charge. That means the client (Upwork) has to pay VAT in the country of its European base, maybe Ireland instead of Germany, but the service is not VAT-free, the VAT is only paid in different countries. Please be aware that I describe the situation from a German point of view, the situation may be different in other European countries. Taxes and especially VAT is rather complicated, therefore large companies use specialists to deal with these problems. 

Hi Margarete, I think there is EU Directive that regulates the VAT taxation on services within EU. You can check it also on the EU website "If you sell goods to another business and these goods are sent to another EU country, you do not charge VAT - if the customer has a valid VAT number." Please check 

 

http://europa.eu/youreurope/business/vat-customs/cross-border/index_en.htm 

 

The key here is for your client 1) to be based in another EU country and 2) to have been registered for VAT purposes in the VIES database. The link to the dabatase to check if your client is registered is:

 

http://ec.europa.eu/taxation_customs/vies/ 

 

I have problems with some clients that are not registered in the VIES database, so I have to charge VAT in this case. 

 

I have to check how it work on exporting services to US, as I am preparing to start "invoicing" Upwork.

 

Anonymous-User
Not applicable

Hi Todor, Yes I know that but goods are not same like services. I already make use of not charging VAT to clients in European countries (outside of Upwork and Elance), but each case has to be checked individually. I do not apply VAT for services but the client has to pay VAT for this in his country. At least you need the help of a tax consultant, but they are not always able to answer all questions. It is sometimes difficult to find out everything you need to know. That is why many companies use the help of specialists to clarify the tax regulations for all the different markets. Good luck!

The VAT regulations are very complex, but my this is my understanding.

 

These are UK regulations, but as they are based on EU regulations I would imagine that they are standard throughout the EU.

 

1. If you are VAT registered, and I would suggest that most freelancers on Upwork are not, or need not be, registered, when supplying services to business customers it is their location that counts as the place of supply.

 

2. All the work done on here can be classified as 'Intangible'

 

3. The regulations for digital platforms state;

 

If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you are making the supply to the consumer or to the platform operator. If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer.

 

4. Therefore, as Upwork sets the terms and conditions and authorises payment, they are responsible for VAT to the client.

 

I would suggest that all work done through Upwork is a digital service. But I'm sure that this could be argued

 

As Upwork is outside the EU all services/goods supplied are zero rated but should be accounted for on the VAT return.

 

 

tvelev
Community Member

I had doubts if we should comment on the VAT topic here or at another thread, but as the general topic is the invoicing from/to Upwork and between freelancers and clients, I think the VAT forms important part of each invoice. As a result, the tax location of Upwork and the issue if it invoices the clients or not might have serious impact on the total cost to the clients.

 

Another aspect is that, if you want to make a living as a freelancer, probably in most of the countries you should register as a business, in order to avoid problems with the tax authorities. Not that much on the personal income tax (as the freelancer may not reach the non-taxable minimum), but as the tax authorities always ask for the VAT.

 

With regard to the VAT, traditionally, it was difficult to prove that the supplier exported the service, as it is indivisible from the person/entity that provides it. Most services were considered produced and delivered within the country of origin, and therefore almost all invoices for services (exported or not) had to include VAT. The only exception was when the service provider traveled to the clientโ€™s country โ€“ than the services was considered exported.

 

With the creation of the common market this approach started to create problems for the free market of services. As a result an EU Directive 2008/8 was adopted, regulating the place of provision of services and their taxation.

 

http://admin.interact-eu.net/downloads/1621/Directive_2008_08_EC_on_Place_of_Supply_of_Services.pdf

 

Let me try to briefly present the current state of the VAT for services within EU (quotations from the above Directive):

 

  1. โ€œFor all supplies of services the place of taxation should, in principle, be the place where the actual consumption takes placeโ€. In practical terms it means, all services are treated as exported, and no VAT shall be included in the invoice. Nevertheless, there are some rules and exceptions on not including VAT in the invoices
  2. โ€œFor supplies of services to taxable persons, the general rule with respect to the place of supply of services should be based on the place where the recipient is established, rather than where the supplier is established โ€œ. It means that your client should be a business entity, with tax number, in order to put a 0% VAT on the service provider invoice.
  3. โ€œWhere services are supplied to non-taxable persons, the general rule should continue to be that the place of supply of services is the place where the supplier has established his business.โ€ The only way to prove that the client is taxable person is to check the VIES database; if it is not included, it is not a taxable person, and the service provider should include VAT in its invoice. The link to the VIES database is in my previous posting.
  4. The VIES database is โ€œa single point of electronic contact for VAT identificationโ€
  5. The suppliers of the services should always declare within the invoice that it charges no VAT due to the EU Directive 2008/8, and attach a copy of the printout from the VIES database demonstrating that the clients with the same tax ID is registered (existing). This is practical advise, not written regulation. 
  6. There are some exceptions, as some services are still considered provided where the supplier is established (intermediation, real estate, etc.). I think these exceptions do not apply to 99% of the people working on Upwork.

 

In practical terms, what it means for clients and freelancers on Upwork:

  1. If we are within EU, and the document flow is for the freelancer to invoice the client, we should not include VAT
  2. The best is for Upwork to have subsidiary in EU with tax registration, so that all intra-EU operations could be free of VAT, both from freelancers to Upwork as well as from Upwork to clients.
  3. I am not sure how the export and import of services to/from US is treated, but the most probable is the โ€œtraditionalโ€ approach โ€“ impose VAT in the country of origin.
  4. Having in mind the current mess of Upwork with the invoicing, this could be a huge issue, mainly for Upwork for not charging VATโ€ฆ.or for not paying it to the tax authorities

 

Hope this helps  

tvelev
Community Member


@Mark C wrote:

 

3. The regulations for digital platforms state;

 

If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you are making the supply to the consumer or to the platform operator. If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer.

 

 


 Hi Mark,

 

Great piece of regulation! This is what all freelancers need! Could you please provide a link to the source?

 

elastella
Community Member
jmeyn
Community Member


@Ela K wrote:

https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-b...


 There is a further link in the document you provided the to: 

Please have a look at the definition of services: https://whitehall-admin.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/...

 

Nothing we provide via Upwork or Elance is affected. We provide digital goods not services/e-services. The same procedure/regulations are valid throughout the European Union.

mark8979
Community Member

Edited - I just noticed that Ela posted the same link

tvelev
Community Member

Thanks to both of you. I think that it is becoming very clear that Upwork should invoice the clients, and the freelancers should invoice Upwork. 

 

Upwork not only imposes the terms and conditions and manages the payments, it also facilitates the work through chat rooms, solves disputes, delivers the work (the freelancer could deliver it through the platform in case the client is not willing to pay), tracks the time, etc. 

 

And, seeing some other discussions with regard to how Upwork manages the proposals to the clients, it seems that it ranks the freelancers for each job posting based on its own algorithms, recommends freelancers for the jobs, etc, In general, Upwork acts on its own when selling the services of the freelancers, much more than a simple point of contact between clients and freelancers . 

(quoting) Thanks to both of you. I think that it is becoming very clear that Upwork should invoice the clients, and the freelancers should invoice Upwork. 

 

----

 

Nobody is saying it, but this is what has always been happening in my country.

I and my fellow Italian "upworkers" simply consider oDesk/UpWork as the final client. There are no alternatives.

 


@Sara P wrote:

(quoting) Thanks to both of you. I think that it is becoming very clear that Upwork should invoice the clients, and the freelancers should invoice Upwork. 

 

----

 

Nobody is saying it, but this is what has always been happening in my country.

I and my fellow Italian "upworkers" simply consider oDesk/UpWork as the final client. There are no alternatives.

 


Many people actually do this and already said so in this thread. But, it simply is not correct. Upwork, like Elance, PPH, Guru and others, is just an intermediate like an agent or a broker. They are not the client. They provide a service and charge for this service. Among the services rendered is the invoicing. They don't do it correctly but this is part of the services.

 

Personally I wonder what will happen should they open an office in one of the member states of the EU. Their billing for the commission they charge us is an automated process and IMHO falls under the regulations in effect since January 1st. They propably are obliged to pay VAT in the freelancers country. Should they open an office within the European Union it could happen that they are presented a hefty bill for overdue VAT. 

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