FIRC certificate from Upwork

[inoactiv]

Do anyone has any idea how to get an FIRC  Certificate(Foreign Inward Remittance Certificate) from earning of upwork.

As per GST LAW which is applicable from 1st July.  There is a 18% charge on any payments received as INR.

LFT payments are first converted from USD to INR and then it is transfered via bank to Indian bank. 

But when u receive payments in INR then it does'nt qualify for GST 18% tax relief.  Only the bank which does the converstion can provide this document. So local bank cannot provide since they received converted money only.

If we are able to get FIRC certificate then it can be proved that money was earned in foreign currency and it stands for tax relief.

Does anyone has any solution how freelancers from India can save there money from GST 18%

[aocumen]

Hi Soumya, 

I'll go ahead and check this with the team so that we can get back to you with more information. 

[mohit_kale]

Hi Soumya, even I tried to do some followup with my bank account manager. But she is also not aware of this and they are not able to help.

Dear Upwork, please do something about this at the earliest.

[vladag]

---

@Soumya N wrote:

... 

Per your post, what is the Upwork's bank? Who is the partner bank please?

Hi Soumya and Mohit,

I'll reiterate the information we shared last year on this thread, that Direct to Local Bank transfers for INR currency and USD SWIFT wires are processed by Wells Fargo in the United States.

Let us know if you need any additional information.

[mohit_kale]

Hi Vladimir, thanks for the update. But I am not sure how our local bank, in my case its Axis Bank, will contact Well Fargo USA? It would be very helpful if Upwork can allow us to download the FIRC directly from our Upwork account. It's a time taking and a difficult process to contact the local bank first and then explain them everything. Finally, we get to hear from the local bank that we cannot assist you in this.

As informed by you, Well Fargo USA does the currency conversion, can you please suggest how to contact them directly to get a FIRC?

[vladag]

Hi Mohit,

Please communicate this information to your bank and they should be able to proceed further with requesting the documents they require in line with the banking procedures, as Soumya mentioned in her post.

[mohit_kale]

Hi Vladimir, I have already contacted my bank, they are not able to assist on this. As they support documentation and followup that is directly being done via their bank only. Need your assistance in getting a NOC/FIRC or a foreign currency conversion proof from Well Fargo, USA. Please help.

[vladag]

Hi Mohit.

I understand the concern you have but can confirm that we were advised by our bank that Direct to Local Bank payments to India are converted to INR prior to leaving Upwork's bank, and since all funds are send to our partner bank in INR currency, FIRC form should not be required.

Please consult a local tax adviser, communicate the information we shared with your bank by contacting their HQ and feel free to pm me any official documents confirming your bank is still requiring FIRC for these transactions. 

[mohit_kale]

Thanks, Vladimir. I will try to contact my bank and CA once again. Will let you know if we still require a FIRC.

[vladag]

Hi Soumya,

I'm sorry if you're not satisfied with the information we provided. Note that we escalate this request near the end of last year and shared the information we received from our bank and team.

I'll gladly raise this issue again to the team but it would be helpful if you'd provide any paperwork regarding the documentation you're required to provide that applies to DLB transfers, since our bank confirmed that  FIRC form should not be required seeing that all funds are send to the partner bank in INR currency. Feel free to pm me once you have more information and I'll process these further.

[tinker_bell3]

Hi Soumya,

I checked and saw that team that followed un on your chat to provide you information about Upwork's bank partner. You can access your ticket here. 

[vladag]

Hi Soumya,

To confirm, I've communicated the information you shared to our team and we're reaching out to our bank for another confirmation. Previously, we've received the information we'd shared in this thread but do realize the importance of accessing the documents you mentioned have on the business operations of our freelancers in India, and we'll follow up as soon as we receive an update.

[bobafett999]

Soumya:

I cen see your dilema.  Money + foreign country can be complicated.  I opened a small NRO account in India from US.  It was a painful experience and now every year I to provide  this or that information.  

I did some research and I guess the best for you might be to open a US bank account.

Read the following blog posts

https://bkpk.me/how-to-open-a-us-bank-account-as-a-tourist/

https://transferwise.com/us/blog/how-to-open-a-bank-account-in-usa

https://www.myusacorporation.com/articles/us-bank-account-for-non-residents

Then you can use transferwise or XOOM - (now it is Paypal co).  I use XOOM becasue it is free if the trnsfer is more than $1,000.

Edit:  I did some more research and found that

https://www.everbank.com/

will take non-resident, non US address, NO SSN/ITIN, as a customer for their checking account (they may need W8ben or some thing).  Their basic or simple account has $25 opening deposit and no minimum balance requirements.

I called their customer service and lady confirmed that.  I actually went through the process of opening the account.  The trick was to have a nine digit number.  Passport # is OK.  If it is not 9 digits the lady asked me to add leading zeros to make it 9 digits, if more  - truncate.

Of course, after you submit they will ask for more documents.

[bobafett999]

Well Soymya what I dug up may help you moving forward and even save you some money.  Read the post again about Everbank.

it will be pain.  I went through that pain for the NRO account.  I wasted my time with several banks in India, finally HDFC was bit less painful.

Getting old stuff may not happen.  Narendra Modi can make any rules he feels like (also it is my experience that individual CAs may  not be that competant.  They also make up stuff).  Couldn't you use your transaction history with corresponding deposits?  Your screenshot does say the money came from Upwork.

[ddeb87]

HI Vladimir,

My tax consultant has also told me that I need to arrange for an FIRC from Upwork as per Indian Income Tax and GST laws. So, I would be also keen to know the process of getting the same. I am  withdrawing funds in the form of LFT from Upwork. Would appreciate Upwork's assistance in addressing this on a priority basis.

@Soumya - thank you for highlighting this.

Best, 

Deb

[anupshinde17]

Soumya, just curious - what kind of questions/demands are made by the tax-authorities in India? And by which tax authority?

For others who use LFT:

1. LFT is not cost effective for large amounts. i.e For withdrawal amount greater than 1200-1500k withdrawals use the USD wire-transfer - the $30 fee is lesser than the conversion cost you end up paying to Upwork and intermediaries with LFT. Do the math, and you will see that USD wire transfers to your bank account save you money. Plus with USD transfer, you have a clear inward remittance and the FIRC document will be provided by your bank

2. Also, if your average monthly withdrawal amounts are lesser than 2500 USD. You are not liable to get an FIRC because you are below the 20L annual revenue limit for GST which is also applicable to exports now. BTW, I would still suggest use of USD wire-transfer for amounts greater than 1500 USD and lower than 2500

I am not aware of any Income Tax laws that need FIRC (correct me if I'm wrong), but GST laws need that for claiming zero-tax exports if you are GST liable.

Also, Upwork (or its intermediary) should provide a GST tax-invoice to freelancers for the use of LFT and the conversion that happens. I don't use LFT anymore - so I don't know. But if this isn't happening, Upwork (or its intermediary)  is clearly evading local taxes/compliances.

[mohit_kale]

You are right Soumya. At the moment filing and meeting GST compliance to get tax exemption for the already transacted amount is the priority. Let us hope that the Upwork support team will help us assist at the earliest in getting a FIRC from the concerned bank that converts Escrow USD to INR. From now on I will prefer a wire transfer to avoid such hassles.

[anupshinde17]

>Also, the 20L limit is applicable only from this FY, not previous ones

From what I understand, the notification came in Nov 2017 and applicable atleast thereon. 

http://www.cbec.gov.in/resources//htdocs-cbec/gst/notfctn-10-igst-english.pdf;jsessionid=18D2476FD0C...

[sridhar_orion]

Soumya - Did upwork update you on the FIRC certificate issue?

[anupshinde17]

Have you tried tracing it backwards? Contact Citibank India grievance redressal and ask them the source of the inward amount for one such transaction. Keep everything in email. They will lead you to a source and so on.

Even if Upwork managed to get you the source of conversion, it will be very difficult to get FIRCs for all those years in the past. Also the entity Upwork didn't exist back then. Also, check with the assessing tax officer if it would be satisfactory to have a few sample FIRCs with similar transaction descriptions.

[ddeb87]

Hello Vladimir and rest of the Upwork Team,

Have you got any response from your bank about the procedure for your freelancers to obtain an FIRC?

This document is very important for statutory and regulatory compliances.

Also, I came across an article on the web, stating that Paypal has a process that freelancers and businesses can follow  to obtain an FIRC (for individual or multiple transactions) from their Paypal's partner bank which does the foreign exchange conversion and remits the INR amount to the freelancer's Indian bank account..

Since Paypal has been able to sort this out for their Indian freelancers, Upwork should hopefully be able to facilitate this as well.

Would greatly appreciate your assistance in resolving this on an expeditious basis.

Thanks,

Deb

=================================

To confirm, I've communicated the information you shared to our team and we're reaching out to our bank for another confirmation. Previously, we've received the information we'd shared in this thread but do realize the importance of accessing the documents you mentioned have on the business operations of our freelancers in India, and we'll follow up as soon as we receive an update.

[harry-hup]

How to enable wire transfer in USD?

[djondinium]

Hi Rishi,

There is nothing to enable, only to add a valid bank account. You can check this help article for more information about it.

Thank you.

[xpertcoders06]

Hello,

There is an immediate 18% GST charge for INR transactions in India.

USD withdrawals directly to Indian bank accounts don't attract 18% GST.

Since UPwork is doing the conversion, I assume there would be a bank in India that UPwork uses to convert USD earnings of Freelancers to INR.

Does UPwork offer FIRC Certificate issuance through a local Indian bank for the purpose ?

Regards

[mohit_kale]

Hi Soumya,

My bank is unable to track the Upwork transaction and hence cannot offer support in getting FIRC. Please update us when you get any feedback from your bank.

@Upwork please help us figure out this. It would be really helpful if you can add a feature to download a FIRC from Upwork portal itself.

[sridhar_orion]

Soumya,

Upwork support has provided me reciepts of transction, should I provide these receipt to my bank (HDFC) to track the transaction and obtaina FIRC certificate? Kindly let me know how did you proceed with this issue.

[canopus_infosys]

We in India are compelled to deduct 10% as TDS on the Service Fee Invoice which Upwork generates. How can this be avoided? Can Upwork provide us something like a W8BEN where then we will not be compelled for TDS deduction on the Service Fees invoices?

[vladag]

Hi all,

As an update, Upwork's partner bank has confirmed it will support FIRC documentation requests sent by beneficiary banks. Please contact your beneficiary bank to obtain an FIRC document.

We look forward to hearing your feedback and would like to thank you for your patience and participation in this discussion.

[sujits]

Dear Vladimir,
That's great news for freelancers.
This is how the process works for Paypal customers to obtain FIRC. Paypal has designated CITIBANK (few selected branches in India) to obtain request on Customers behalf forwarded via their bank. They have a fixed format document that we need to fill with all the details, get it signed by our local bank and deposit it to their centre with a nominal charge. FIRC document arrive in two weeks time in our local bank from where we can collect it. So my question is

1) Can you provide document format and what deatils will be required. If you can provide a sample on your website which we can download, it will be great as we don't know what  details, etc you will need.
2) Which bank and which branch address we need to send our FIRC request to? 
3) Will there be any charges for this?
Thanks.

[vladag]

Hi Sujit,

You need to submit a FIRC document request through your beneficiary bank (applies to all banks as far as we are aware) and our bank will provide it directly to your bank. We don't provide a sample format since the process is strictly on the bank side, and your bank should be able to advise and gather from you the necessary details in order to submit a request.

Please consult your bank about possible fees the request might incur and follow up with an update once you complete this process and receive the documentation.

[sujits]

Dear Vladimir,

But which Bank and branch may bank should get in touch with? With the transaction no, my bank is unable to identify the Bank.

Thanks.

[vladag]

Hi Sujit and Debabrata,

I understand the problem you're having and would like to advise you to submit a support request, so our team could assist you directly and share the necessary information which will enable you to successfully submit a FIRC request with your beneficiary bank.

Feel free to follow up here with more feedback about the process or share any questions you might have so we can advise.

[vladag]

Hi Soumya,

Please feel free to follow up with your question on one of your previous tickets on the subject of FIRC documentation and our team will be able to advise you directly. Thank you.

[g_vasilevski]

Hi Soumya,

I understand your concern with this but your bank is the one that needs to provide you with the FIRC form.

As advised before, you need to submit a FIRC document request through your beneficiary bank (applies to all banks as far as we are aware) and our bank will provide it directly to your bank. We don't provide a sample format since the process is strictly on the bank side, and your bank should be able to advise and gather from you the necessary details in order to submit a request. Thank you.

[technisuresol]

Hi Upwork support team,

Can you please elaborate process to submit a FIRC document requests through individual beneficiary bank to Upwork bank?

This will help a lot.

Best Regards,

Jitendra

[g_vasilevski]

Hi Jitendra,

I understand the problem you're having and would like to advise you to submit a support request, so our team could assist you directly and share the necessary information which will enable you to successfully submit a FIRC request with your beneficiary bank. Thank you.

[ddeb87]

Hello Vladimir,

Thank you for the update. This is really helpful.

However, can you please let us know the name of Upwork's Partner Bank and their branch name that we can supply to our bank?

Once you do that, I'll give a formal letter to my bank to set the process in motion and will update all in this thread.

Thanks!

Deb

[mohit_kale]

Dear UpWork support staff,

Any updates on who is your partner bank that does the USD to INR conversion for Indian freelancers? And what is the process to get a FIRC certificate for our "Direct to Local Bank" transactions?

Most of the Indian freelancers on UpWork are struggling with the FIRC issues since last year or so, including me. If UpWork does not know about this or UpWork cannot share any information on this or UpWork cannot issue a FIRC for us, then please remove the option for "Direct to Local Bank" for Indian Freelancers.

It's misleading and makes us liable to pay an extra 18% GST on the export of services.

Frankly speaking (on an average), 20% goes to UpWork and 18% as GST, which makes it 38% as service fee and tax, we get only 62%.

I hope UpWork will understand our pain and help us out as early as possible.

Humble request and a suggestion, please add an option in UpWork itself to download FIRC for all the  "Direct to Local Bank" withdrawals.

[anupshinde17]

First, do not use LFT if you are GST registered. Use Wire transfer -  it is actually cheaper for anything more than $1200 or $1500 range. And that is much more cleaner documented money trail.

I could be wrong, but I have reasons to believe that UpWork will not help with the FIRC and you don't want to be a ping-pong ball. Worse - you don't want to be a randomly selected victim of tax-terrorism

Now if somebody does not have a freelance income at that level to use WireTransfer profitably - why are you registered with GST in the first place? Cancel your registration, you are likely exempted (except if you have other business income). See this notification:
http://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-10-igst-english.pdf

UpWork, please understand that GST is a real pain. FIRC is a legal requirement that predates much before that. Add to that the hasty government implementation and some exploitative accountants.  A simple article  written by a legal professional, when selecting LFT as an option would be great. Atleast something sugar coated summing up to "You've been warned!" when they go for LFT

[mohit_kale]

The issue is with previous withdrawals using "Direct to Local Bank".