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Romania - New UpWork Invoices not valid according to accounting law

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Stefan C Member Since: Nov 1, 2011
11 of 18

Elena, I’m petty sure that’s not an issue. As Joachim stated a few posts above, that’s an absolutely normal business procedure in many countries, and I don’t see why it would be different in RO.

 

As a matter of fact, I’ve just renewed my invoicing software subscription a few weeks ago, and paid for it using my company credit card. The invoicing software I use is probably the most popular invoicing software in RO (they claim to serve more than 50k businesses), and is provided by a RO company. My company credit card was charged by a 3rd party payment processor (one of the largest in RO). The credit card transaction on my (company) bank statement does not include any reference to the company I purchased the  service (invoicing software) from, it only includes the 3rd party payment processor name.

 

My point is, I highly doubt two large, established RO businesses would not be aware of such a regulation or purposely break the law.

 

Who told you guys about this “thing”?

 

 

Unfortunately I do not know any good advisor, my accountant is pretty average to say the least. I might need some of my own questions answered by a more experienced tax advisor in the near future (like next month). If I manage to find a knowledgeable person, I can PM you. You may still want find a “local” accountant.

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Elena P Member Since: Nov 28, 2012
12 of 18

Thank you, Ovidiu. Well, this doesn't solve the issue of having an invoice from the freelancer (via Upwork) and the money being taken by Upwork. Right?

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Ovidiu F Member Since: Oct 2, 2017
13 of 18

Elena, yes it does not solve the issue of receiving an useless invoice, but you still have alternatives to deduct from company account:

 

a) as Stefan C already replied using Civil Convention service contract (in which case any natural person freelancer will pay income tax)

b) user your own money (not company money)

 

I won't discuss the case where the freelancer has PFA or it is employed in your company because I think that is a very clear case in our legislation.

 

I had a lot of issues with invoices from other countries, not only for online work. I cannot say that ithis problem is because this is not properly regulated. I graduated some accounting studies, and from my point of view, as entrepreneur I can say the Romanian accounting is over-regulated. The problem mainly appears because in many countries the regulation is more lax, and they have a lot of exemptions especially for natural persons involved in business, like UK Fiscal Code, for instance.

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Stefan C Member Since: Nov 1, 2011
14 of 18

Ovidiu, I wouldn’t suggest that (b) as a legal workaround, lol. You might want to edit that portion.

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Ovidiu F Member Since: Oct 2, 2017
15 of 18

I think it is just because the way UpWork works.

 

For some reason I am not able to purchase services from freelancers as a natural person on UpWork.

 

I am able to buy this kind of services from Freelancer.com, and I did it before establishing my company. 

The idea is that I can spend my own money as I wish (including money received as company dividends).

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Ovidiu F Member Since: Oct 2, 2017
16 of 18

So not only the invoices on hourly plan issued by UpWork are completely useless, but you cannot register "Client" account on UpWork if you don't have a Company. For this reason I can say UpWork is not exactly individual business friendly.

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Joachim M Member Since: Mar 23, 2015
17 of 18

@Ovidiu F wrote:

I think it is just because the way UpWork works.

 

For some reason I am not able to purchase services from freelancers as a natural person on UpWork.

 

I am able to buy this kind of services from Freelancer.com, and I did it before establishing my company. 

The idea is that I can spend my own money as I wish (including money received as company dividends).


 Ovidiu,

 

Look at it from the EU's point of view, Romania is part of the EU! A freelancer is a business, period, no exceptions. What you call "natural persons" is just moonlighting. A freelancer may be exempted from charging VAT, absolutely normal and a delight for the tax office, but he/she is still a business providing billable services. In Germany there is no special requirement for registration, you simply notify your tax authorities and apply for VAT exemption if your turnover is less than 17,500 Euro/year. These regulations differ from one member state to the next but what remains is that a freelancer is a business.

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Ovidiu F Member Since: Oct 2, 2017
18 of 18

Thanks a lot Joachim. As you said, "there is special requirement for registration".  The main topic here was about invoices received from unregistered businesses. I agree that a freelancer is a business period. But according to fiscal law, this kind of business can be registered and unregistered. So, we were interested in accepting somehow invoices from unregistered businesses.

 

You see, UpWork does not ask frelancer if he/she is a registered business, and that's fine. The root problem in our discussion is that a company cannot accept invoices from an unregistered freelancer.

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