UpWork invoices are not compliant for EU

[emarek11]

Hey everyone,

I am a EU based client and I hired someone for a certain project. Project is proceeding quite well. Problem which I have is that my Finance department is not satisfied with invoices which we receive from UpWork. For hourly based work each week we receive 3 pdfs:
- receipt, seems fine, it contains total amount for processing fee and actual work

- invoice for payment processing fee (3%), which is okay (screenshot attached)
- invoice for actual work and this one is not okay (screenshot attached)

The "from" section is populated with personal data (name, surname, address) of a guy which I hired via UpWork. This it just wrong. This is an invalid invoice under our legislation and I can not submit it further. Invoice comes from UpWork and it is paid to UpWork meaning that "from" section should be populated with their data. Just the same way as it is in processing fee invoice.

I bet I am not the only one with this problem. I am just wondering how you guys solved this?

Thank you for any answer!
Marko

[LuiggiR]

Hi Marko, 

The information that's being shown in the invoices is correct and working as designed. The freelancer that you hired via Upwork is the one providing the services you paid for and Upwork works as the platform that allowed you to connect with that person. You can check this help article and section 6 of the TOS to learn more. 

Thank you.

[emarek11]

My freelancer does not have a legal business entity. He is a phisical person and my company can not accept an invoice which comes directly from him. This is exactly what UpWork does, issues invoices in freelancer's name while actually collecting money.  Sadly this kind of invoices are invalid under our legislation and would be matter of investigation. Most likely resulting in some kind of fine for my company and extra taxing my freelancer. Let me ask you again. Is there a way that all invoices which I pay to UpWork actually comes from UpWork? Please a yes/no answer.

[VladimirG]

Hi Marko,

I can confirm the information Luiggi provided is correct. We can't provide legal advice but you can consult a legal adviser to discuss using the information available in Upwork invoices to edit and create your own invoices in case the current ones do not meet your requirements.

I'd like to invite other experienced freelancers from Slovenia and EU to follow up and share their experience with reporting their earnings on Upwork.

[emarek11]

What do you mean by "edit and create your own invoice". Is there a tool here on UpWork platform where I can set what is written under "from" section or you meant that I should recreate an invoice from scratch for myself using the information from original invoice?

This thread is not about how freelencers report their earnings. It is about what is written on the invoice which UpWork charges to the client (my company in this case).

[colettelewis]

I had one client from Spain who insisted that I create a separate invoice, which I did (as an autoentrepreneur in France, I do not have to charge VAT). I sent both invoices to the client. There was no feedback on them, so I imagine they were correct. I haven't had any problems with Upwork invoices and my own tax returns in France. 

If your company is also your client, are you hiring yourself? 

[tta192]

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Nichola L wrote:

I had one client from Spain who insisted that I create a separate invoice, which I did (as an autoentrepreneur in France, I do not have to charge VAT). I sent both invoices to the client. There was no feedback on them, so I imagine they were correct. I haven't had any problems with Upwork invoices and my own tax returns in France. 

If your company is also your client, are you hiring yourself? 

---

In cases like this, you should make it very clear to the client that the new invoice is a replacement of the original one, and they should not use both versions in accounting. Otherwise you risk having issues yourself. Better add a note on the new invoice stating that the old invoice is void.

[colettelewis]

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Andrei T wrote:

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Nichola L wrote:

I had one client from Spain who insisted that I create a separate invoice, which I did (as an autoentrepreneur in France, I do not have to charge VAT). I sent both invoices to the client. There was no feedback on them, so I imagine they were correct. I haven't had any problems with Upwork invoices and my own tax returns in France. 

If your company is also your client, are you hiring yourself? 

---

In cases like this, you should make it very clear to the client that the new invoice is a replacement of the original one, and they should not use both versions in accounting. Otherwise you risk having issues yourself. Better add a note on the new invoice stating that the old invoice is void.

_______________________

As I said, I have had no problems. And I had no problems with the one client who asked for a separate invoice.  

---

[tta192]

Unfortunately, Upwork is not the seller - the freelancer is. The invoices are created on the platform just for convenience. But you're buying the services from the freelancer, and whatever financial information he/she provided will be added on the invoice.

Sometimes the automatic invoices are not compliant and/or incomplete, as in the situation you describe. The freelancer is responsible to provide you the correct version. But if they don't have the proper documentation / entity / etc you're stuck with the automatic invoices. But those are usable too, just tell your accountant that's all you have.

To avoid such issues in the future, check with the freelancer prior of hiring whether they're able to provide proper invoices. Just to make sure, you can make a very small bonus payment on the first week and wait for the invoice; if it's not what you need then close the contract and find someone else.

[emarek11]

Nichola, no, I am not hiring myself, why would I do that? Please read the thread again. I guess you didn't understand everthing. Take a look at the attached invoice. All I need is "from" section to be populated with UpWork's data instead of my freelancer's personal data. That's it, nothing else.

Andrei, yes, freelancer provides services, but payment goes to UpWork therefore invoice should be from UpWork and not from freelancer.

[prestonhunter]

Upwork is a service that clients use to find, hire and pay freelancers.

Clients do not hire Upwork.

[ac386a58]

Ι have the same issure right now. The Upwork invoice does not include the Agency/freelancer VAT number either so how can I use that in intra EU invoices?

Did you find any solution?

[deborah-ponzio]

I pay the taxes in Italy and my local tax advisor told me that Upwork's invoices carry the name "invoice"but are not proper invoices for the Italian tax authorities. I am in the process of creating my corresponding invoices translating the content, adding a new local number, converting the currency as per the date of the invoice issue, adding any data which is missing. From next year I will have to create electronic invoices and I do not know what will happen with Upwork's EU VAT number if it is not accepted by the VIES system electronically.

[ac386a58]

We are using Upwork to work with an Agency based in EU.

We are also based in EU. So this transaction is an Intra EU transaction. This requires to have a proper VAT invoice including the supplier data and Vat Number as well as the client data and Vat Number.

Currently the invoice I received from Upwork only states my VAT number and not the agency's.

My accountant has concerns on how to use this invoice when the supplier VAT number is missing.

Anyone else faced this issue so far?

[AndreaG]

Hi George,

I can see you were able to submit a support ticket with our team regarding this. Please allow some time for our team to review and they will update you directly via ticket as soon as possible.

[ac386a58]

It seems it is taking too long to get a simple reply to a known issue.

I am not the first to ask such things. It just did not get clear so far on what is the solution.

[1721f300]

Hey everybody,

I don"t understand why Upwork doesn't give an clear answer. We are all telling to Upwork that we have Fiscal issues with our respective accountants and Upwork seems to escape the Subject. We are paying a freelancer via the Upwork service, this is ok. But the invoice is not legal. Simply no legal if i have  to justify a payment to Upwork. If my company pay Upwork : 

1/ we need an invoice coming from Upwork, with fiscal registration number of the company, with address and contact.

2/ Or if the invoice is from the freelancer, with fiscal number, or entrepreneur registration number (depending of the country). TO MAKE IT CLEAR : Aafreelancer which is not registered is not allowed to invoice. So Upwork is proposing a service where potentially we can be in contact with freelancer not registered? This is not legal. So it has to be an obligation, during the freelancer supscription, to give fiscal data. No fiscal data, no real freelancer, not legal. Is it clear or not? If a freelancer has a VAT number or fiscal number or any registration number from his country, it's an obligation to appear in the invoice, first. And Second, knowing that the payment is done to Upwork, you need to attach to the invoice General conditions or something official explaining that we pay Upwork so as to pay the freelancer, upwork beeing an interface to secrurize the transactions between a client and a freelancer.

Please don't try to answer like that just because you think it's like that. You are in serious problems if you don't take this seriously. For the administration, the invoice you are emitting is assimilated to illegal work. We are dealing with ressources, not bananas, and it's the center of the political discussions and administrations in each coountry making a lot of fiscal investigations. I don't say that Upwork make illegal work, but you can't answer how you are answering. You should take this very seriously. Personally, i have to get out my company from this platform. The invoices you are providing are not valid. And it's a shame to not use a service because the provider doesn't want to go deep in clients obligations. 

[7999fbee]

Did you ever solve this?

[emarek11]

Yes, I stopped using UpWork.

[feed_my_eyes]

The invoice does come from the freelancer, not from Upwork. You did not hire Upwork to do the job for you, you hired the freelancer - Upwork is merely an intermediary for payment processing, in much the same way that if you hire a freelancer and pay them via PayPal, it doesn't mean that PayPal worked for you.

As a freelancer myself, I was required to provide my tax registration information to Upwork, and as far as I'm aware, this is a requirement for every freelancer here. I don't know what invoices look like from the client side, but if my tax/business registration information is missing from an invoice or if it wasn't compliant in some other way (like if I needed to charge VAT to a client), I am always willing to create a separate invoice for the client myself - did you try asking your freelancer for this? You'll get much farther solving this with the freelancer directly instead of dealing with Upwork, because again, the business relationship is between you and the freelancer, not you and Upwork.

I can also tell you that I've worked with many EU businesses via Upwork over the years - including some very big companies - and there has never been any problem with them saying that the invoices aren't legal.

[adfa98b3]

Hello Christine, 

you may be able to help me with my issue or at least guide me to the right direction. I'm the freelancer and I've just finished the project for one of my clients from Sweden. I'm based in Czech republic therefore I'm required to report my income to Czech Tax office each month via electronic form. For that I need client's VAT ID on the invoice which is missing. I have other invoices, i.e from client in Canada which includes VAT ID so I assume it's actually issue on the Swedish client's side, not Upwork's - is my assumption correct? 

I've contacted my client re missing details on the invoice and was told that it was never problem on their side and it is not supposed to be there.. what would be the next step?

Many thanks in advance for response.

Adel

[iana_vasileva]

I have the same issue with Upwork's invoices. Aren't you supposed to at least try to do the work we are paying for? I've just noticed that half my clients are registered here as physical persons, and the other half are companies but didn't provide EIN number or tax number or anything that I could use to even create a legal EU invoice on my own.