I've been working through Upwork for a while now, currently working for two companies on long-term contracts. Although having read almost every page about taxes (belasting) in Dutch, I'm still very confused....as I went through the forum, I saw I wasn't the only one in a confused state about VAT.
I was wondering if there was someone who could help me out what to do in order to properly file taxes as a Dutch freelancer. So far I read that I should bill my clients - almost like a 'fake bill' - on which I would write the 21% VAT that we are obliged to pay as Dutch freelancers. This bill should include both of our VAT numbers.
So say, my client pays me $20/h , I should charge him around $16/h and mark the $4/h as VAT.
So here my questions...
A. Am I going the right way with these thoughts?
B. Does this work the same with non EU-countries
C. Is there anything my clients have to do, besides accepting the bills I send them?
Solved! Go to Solution.
Thank you Erik. I will consult a tax advisor as soon as I'm in the Netherlands again....but as just a simple starter with a basic income living in Asia, I thought it wouldn't be too bad to share tips on here. It seems more people are struggling with these questions and I think creating an invoice with VAT on Upwork is more or less the same for all Dutch freelancers. Since Upwork is a different system then say 'regular clients', I struggle adding VAT to the billings. It seems to be a reverse process.
However, consulting an advisor will give me definite answers and clearity, so I appreciate your response!
Judith W wrote:
Thank you Erik. I will consult a tax advisor as soon as I'm in the Netherlands again....but as just a simple starter with a basic income living in Asia, I thought it wouldn't be too bad to share tips on here.
If you are iving in Asia, should you not consult a tax advisor in the country you are living in?
Judith W wrote:
Hey, I have a non-resident taxpayer status. It means that, as I'm working for Dutch companies, I have to file for taxes in the Netherlands.
I consulted with a tax advisor and they couldn't grasp the concept of Upwork - they figured Upwork operates in the same way as freelancing agencies in the Netherlands.
Did a bunch of research on my own though, so here's how I'm doing it at the moment:
1. For each Upwork's invoice, I create an invoice for my own bookkeeping (regardless of the client being in EU or not) and attach Upwork's invoice to it
2. My invoice contains my full details + VAT ID and the client's full address
3. If the client is in EU and has a VAT ID, I add their ID to the invoice, "charge" 0% VAT and add a note at the bottom that VAT is reverse-charged to the client
4. If the client is in EU and doesn't have (or doesn't provide) a VAT ID, I -should- charge 21% VAT (just like in the example you mentioned) -- but see note #2 below
(5. If the client is in NL, charge 21% VAT regardless of having VAT ID)
Quarterly VAT reports:
1. For EU clients/invoices which you have VAT IDs for, you'll need to file an additional form (Opgaaf intracommunautaire prestaties)
2. For EU clients who didn't provide or don't have VAT IDs, I file through MOSS (Btw betalen via 1 lidstaat van de EU) -- I've only done this once or twice and I had to pay the tax amounts of the countries I was filing taxes for. So e.g. for a client from Portugal, I had to pay 23% if I recall correctly. Not 21%. I may have messed that up though.
Hope this helps!
Thank you so much Ines! This is super helpful. I knew there was a lot more to it then simply providing the Tax Service with the invoices from Upwork. A lot of administration that we have to do ourselves.. So I guess I really have some research to do!