I want to start a company (a PFA) and report my earning to local tax authorities.
Some of you mentioned that a freelancer should invoice the client and some of you said that we should invoice Upwork directly.
Based on what contract do you write your invoices? As far as I understand each invoioce needs to be backed up by a contract in Romania.
If you invoice the client, do you make a contract and have the client sign it? If yes could anyone share how this contract looks like?
If you invoice Upwork directly, based on what contract?
Peter, really curious if you ever found an answer to your message.
I'm having difficulty with this as well and then some:
My main struggle to understand so far is the below:
- I signed up on upwork and started work in Nov 2018.
- I was not registered anywhere (not as PFA nor SRL).
- Therefore I did not dare take out any money since I started - was afraid someone might notice money comes in my persnal back account and would ask where the taxes were paid.
- Now I'm in the process of opening up a SRL (the RO equivalent to LLC)
- On my upwork account I can see the invoices from me to the client but they are dated from before the SRL (LLC) was setup.
Does anyone know a way of being able to put this money on the company bank account so I can pay taxes on it and use the money?
It would be a shame to loose it all for not being able to take it out since it's dated before the start date of the company.
My accountant said I should issue an invoice to Upwork (which to me does not sound correct since the invoice upwork prepares in my name has my name and my client's name) or client (seems more legit) -- but do you actually have to send this invoice? .. or just create it for the total sum I have on upwork so far and file that invoice?
Does anyone actually check what I invoice vs what my client pays (they are in the US).
Hope someone can shed some light, since these type of online work and invoicing is not something our RO accountants are very familar with as far as I can see.
Thanks in advance,
Normally you should have declared that money already and paid taxes on it for year 2018. The taxes would have been higher without a SRL, but the funds in your Upwork account are still yours like in a normal bank account.
What you can do now is issue a new invoice to Upwork for the entire amount (like your accountant advised), or issue a new set of invoices to your US customers(this is more complicated as you would need to take the commisions into account, etc).
It would have been more difficult if you had clients from within EU.
That's really helpful Andrei and makes sense.
I guess the invoice I would issue for upwork doesnt need to be sent to upwork.. just to have it issued and registered in my "contabilitate". To me this would make sense because the upwork created in my name by them on the portal and the one I create for my accountant would have the same sum.
Does that sound correct to you?
Thanks so much for the super fast reply
UW may not care about the invoice (they make it clear in the TOS they are not your client) but you should still send it. The amount on the invoice should be what you received after the commission was paid. Example: client pays $100, UW sends them an invoice for $100; you get $80, UW gets $20. You issue an invoice for $80, not for $100.