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973e3712
Community Member

I need help with filling my taxes as Portuguese freelancer on Upwork

Hello from Portugal

 

I just started on Upwork, and I need help with this, please

 

I'm from Portugal and I need help to declare my earning as a freelancer... In Portugal, we have to declare earnings for everything and make a receipt with the vat number.

 

 

I don't know if I should create the receipt from Upwork(don't know how to do it), or if I should create a receipt from the money I receive in the bank every month, or if I have to do it in the name of my clients. Does anyone know what I can do?

 

 

Thanks in advance,

Fabio Matos

31 REPLIES 31
djondinium
Community Manager
Community Manager

Hi Fabio,

 

I shared your concern with the rest of our team and one of our agents will reach out to you directly via a support ticket to assist you further.

Thank you.

~ Aleksandar
Upwork

Hello, Aleksandar! Could you share the info with me too?

 

Thanks, appreciate it.

Catarina

Hi Catarina,

 

One of our team members will reach out to you directly via a support ticket to assist you with your request.

 

Thank you! 

~ Bojan
Upwork
marta_lourenco
Community Member

Hi Fabio,

 

I've been working here since 2013, I think I can help you with those questions.

So, as a Freelancer you have access to all the invoices that UpWork issue through your Reports - Transaction History. There you should save all the invoices available as proof of what you've earned.

In Portugal we are obliged to pass a "Fatura-Recibo", even though UpWork does this for us, we need to do our own Fatura-Recibo. The best is to do it as soon as the UpWork Invoice is available so it will count as earnings from the current month.

On Fatura-Recibo you will need to put the Client Name, the Country and the value in Euros! Use the site of the "Banco de Portugal" to do the conversion on the date that was due how much was in euros what you received and that's what you will put in your Fatura-Recibo.

They will also ask about the VAT and the "Retenção" that you've made.

For the VAT you need to see if the client is inside or outside EU. If outside, for example USA, you will use the "Art. 6º" because of the EU rules of not an EU company you don't charge VAT. The "Retenção na Fonte" you will put "Sem Retenção - Artigo 101, nº 1 do CIRS".

The VAT number you will not have, so you put "-".

And that's all for the Income Invoices.

About the Fees! That's a different issue that I still struggle to find a solution to.

You are obliged to declare VAT when UpWork issue their Fees Invoice (Commissions). On their Invoice is "Reverse-Charge" which means that you should pay the VAT in Portugal according to the Portuguese Tax Values. 

We do have a way to declare these values so that we pay the VAT, but we should be able to add this Fees Invoice to our expenses and the "E-Faturas" doesn't allow us to add an EU Vat. So I will try to tell you something more about this when I find the solution for it.

But I hope I did help you with your main question.

Hi Marta! As far as I know, you should declare those fees in your "Declaração periódica". Also there you get to deduce them. I reached out to the Finances authorities through a written request on the Portal das Finanças about, and they instructed me to do so. If you want the specifics, feel free to contact me via a private message and I'll share the information they sent me.

Hello Ruxanda, could you please pass this info to me?  I am just starting and looking for info about this

 

Hello Marta,
In 3 jobs here at UpWork I only made $700 (with fees $530.45).
Even with this amount alone, do we have to declare something to the finances in Portugal? Haven't we already discounted here at UpWork?

Hi Joao and sorry for the late answer, but I've been away from the community and couldn't answer before.

I hope I'm still in time to answer to your doubt.

What you pay to UpWork it's a Fee (Income) that they declare in their own country about it, according with US rules.

Then we need to declare here that we received (according with your numbers) $530.45 from the Client (through or own Invoices/Recibos Verdes) and paid $169.55 to UpWork (through the Modelo 30 declaration because it's an US company)

Now, if you want to declare it or not, even if it's only $5 it's up to you. You know the rules and what benefects or consequences can bring. But if you ask me, if you "need" to declare it... I will answer the law says so, and I do declare, but I'm me! 😄

Hi Marta,

I'm a bit confused here. In Joao's case, shouldn't he declare $700 from the client?

Thanks,
Bernardo

Hi Bernardo,

 

Yes, he should declare it. It's income.

 

Greats,

Marta

Hey Marta! I'm portuguese, I opened now my activity and now I need help declaring my earns and help typing the "vat" that they ask on upwork, because I'm searching all around the internet and community and I still don't understand. People told me 1000 different things, some people told me tat I need to make the recibos with the name of each client, some told me that I need to invoice to upwork, some told me that I just need to put the € that I receive on the bank because I have "rg simplificado" I should wait to the money gets on the bank to invoice in €, and I'm so confused, I don't know how to do that because people does it in different ways, what's the best way to do this without any multa? 

 

Can you please contact me on @maiyhara instagram or email imrferreira4@gmail.com? Thanks, its urgent!

Hi Maria,

I'm so sorry for the late answer. I hope I'm still in time to help clear your mind.

This is not easy for no one, specially at first, when we start.

But I'm going to try my best and I hope a lot of people sees this...

As I answered to Ana Margarida on this post just a bit ago. 

To UpWork you pay Income (Fees and Memberships) and they are like your "secretary", the client pays your income to you through UpWork.

So, you pass your Recibo-Verde in the name of the Client (like you see on UpWork Invoice it's the Client Name on Top and Your, not UpWork).

UpWork creates another Invoice related to the costs you have with UpWork Itself.

And you create your Recibo Verde when the money is on your UpWork Account, not your bank!

Hey marta!

I opened today with an accountant, and I am so confused, being that it is my first year I am exempt from vat right?
-Other questions... as I have simple accounting I have to pass invoice for upwork rates?
- What is the value so I have to put on the invoice receipt, the value without the fees or the total value of the project including fees.
-I guess I will have to fill out a document every month called recapitulative statement, is this right?
-The accountant just opened my activity and my framework is exemption article 53, but I provide services to international clients.
- another question what is the model 30, i noticed that they talk a lot about it and the rfi-21

Hi Liliana,

You're exempt from VAT so you pass your invoices (recibos-verdes) under the article 53 when it's for clients inside Portugal! Outside Portugal, like most of the clients here you use the article 6, even if you need to charge VAT.

Your Invoices are in name of the client, not UpWork, with the full amount the client pays you.

UpWork fees are for the Modelo 30 (to be filed in when paying income outside the country).

"Simple Accounting" only means that you do not need to have an accountant.

I'm sorry to ask Liliana, but if I understod right you hired an accountant, he didn't explained to you all the things you need to do? He should be the best to answer your doubts, after all you're paying him for that. If he doesn't know all this information, then, sorry to say, but you don't need him. He doesn't know about this specific situation of working with companies outside the country and/or outise EU.

Don't waste you're money with that if he doesn't know the basic things on this situation.

 

 

 

 

Thanks for the answer Marta!
I've been to 3 and talked to 2 people from finance and some said the amount I get in the account and others the total amount...
If I put the total value (200) and I only received (150) the state will not charge me more/more fees, I am new in this so I do not understand anything... how then they know that I paid 50 of fees to upwork? Do I fill out the model 30? And if so when do I have to fill it out, and even if I do I have to put in the total value of the project right?
Can I be double taxed?

About the rfi, I don't know what it is or fill anything out..

Thank you very much!

Hi Liliana,

This is the situation... The client paid $200 to you and UpWork took $50 (taking the example you gave). The $50 did went out of your balance on UpWork, after you received from the client.

Because you pass Recibos-Verdes to the client, and he does not have anything to do what "your deal is with UpWork", you need to say that he paid you the $200!

Then you have a different invoice for the $50 that UpWork took as a fee. This is your own cost with your "business" so you will declare it apart from the money you received from the client.

In this situation, UpWork is charging a Comission for every client that pays you. This comission is Income! And you need to say in Portugal that you paid that to UpWork, so you use the Modelo 30 to declare income paid to a company or a person based outside Portugal. 

The finances will cross the information that you pass invoices and declare costs (income) paid and will not charge you nothing on that.

You fill in Modelo 30 every month, related to the month before, only with the value of the fee, not the total the client paid you.

You can't be double taxed, that's why you do all the necessary steps.

The RFI it's a document that frees you to withhold income (retenção na fonte) in the name of upwork. 

For example, when you do register your Recibos-Verdes to a client you have an option saying if you want the client to withhold a percentage of your income (the value he paid to you) to then be paid to social security. (This only aplays if the client is a company or freelancer with organized accounting. Then you can ask them to do the "retenção na fonte").

In this situation, you will not pay social security to USA based companies, even though because they may have other rules, so you need to have the RFI (the legal way) to free you from that responsibility.

One more detail... don't forget that you pass Recibos-Verdes in Euros not Dolar! It's important to convert the $200 to Euro on the day of the Invoice that UpWork provides you!

Hi Marta! Thanks for giving out so much information 🙂
In order to properly fill out Modelo 30, we need UpWork's attributed NIF number, right? Would you be able to provide it?
Thanks!

Hi Marta,

This was a very useful answer, thank you for posting!

Does anyone have the portuguese NIF of UpWork? I've asked Finanças (via the e-balcão) but they've left me hanging for the last 2 weeks 😞

marta_lourenco
Community Member

Hi Fábio. UpWork doesn't know as well, but I can help. The problem is that you will need to do a lot of things. You need to create invoices for what you earn, fill in "modelo 30" for what you pay to upwork, fill in the rfi-21 so you're not oblige to withhold for social security, need to know unwpwork vat number in Portugal besides their number in the USA (and this is the only thing upwork can help you with), pay vat (even if you not oblige to charge it) in Portugal for each fee you pay to upwork... and please! Change your activity so it shows international, so you stop pay vat yo upwork! Otherwise you will pay in double. So, validate you vat number as soon as possible on upwork.  It's a lot if information, but after knowing it all it's easy to keep the track. Upwork should hire me to help with this questions... They put the platform available for everyone but don't know all the rules. They should have at least one person representing them in each country to help on this kind of questions. Because a lot of people don't know and are doing it very wrong. Are you ready to learn all the details? Or you know already?

Sorry for the misspelling... I'm using my phone.

Hey Marta,

you are right, I told Upwork already that they should have one specialised person for this in each country since they make it complicated through the fees.

You wrote so much and I only understood half of it. I just started to write my first faturas recibos. And now I struggle too with the fees deduced by Upwork. What shall we do with them exactly? So it is not a declaracao periodica like Ruxanda said?

I fill out my normal recibo fatura (the amount that arrives on my bank account, right) and then for the fees I fill out "modelo 30" and "rfi-21" plus I asked Upwork for they vat number in Portugal (and only enter this one?) - did I understand this correct? And I do even have to this even though I do not pay vat?

Sorry to ask so many questions. Hope you still could help? Ah and when do I need to fill out these forms, like how often? Always when I fill out fatura-recibo?

 

Thanks so so much.

 

Best regards,

 

Julia

Hi Julia. It's not that easy indeed, because it's a lot of things to do for a Freelancer. So, when you do your Recibo Verde you need to use the Rule 6 on the VAT, because you will never charge VAT to a client outside Europe. When it's inside Europe you need to do the Autoliquidacao option, because the clients are obliged to declare it on their own country. FIRST THING TO DO... you need to declare/inform the Finances Office that you are doing services for foreign countries, so your NIF it shows up on VIES website as a valid number for internacional companies. Second, give your NIF at UpWork so they do not charge you VAT! You will declare and pay VAT in portugal, not them. Then you will need to declare how much you paid to UpWork on Modelo 30, declare the VAT (IVA) and pay it. I do this every month, about the month before. That's the best way. UpWork Vat in Portugal, they do not know, but Fiances can give it to you. The RFI 21 you need to print it and fill it in, together with a Document that UpWork can send you with their ITN number in USA, because you will need this number as well. The RFI 21 it's a document that declares that you are not obliged to withold Social Security in the name of UpWork. Think of UpWork as your Assistant that search for jobs for you and you pay her/him a Comission for each job you get. In the end that Comission it's their Income and you need to declare it. The Recibo Verde is about your own income. Every time you have an Invoice from a Job at UpWork you need to create a Recibo Verde

Hi Marta, can I hire you as accountant? 😉

Hi Stefania. Sure! I am already doing that with other 2 Freelancers. 😉

Hi Marta,

I've been in contact with our finances and they explained me how to fill out the recibos, the modelo 30, the adress declaration for the rfi 21 and the rfi 21  itself. What I don't understand is - do I fill out the rfi 21 to Upwork, or to every client I work with? I've talked with them about the rfi being a document that declares that I'm not obliged to withold social security, but they didn't understand what I meant by this. Could you explain it a bit better?
And thank you in advance, you're a life safer!

Hi Ana,

 

Sorry just now I'm answering! I don't know if you already know the answer to that, but if not, here it goes.

 

The RFI 21 it's only to fill in in name of UpWork indeed. Because you only withhold from Income Paid and not Received (When you receive who pays to you withhold the money). With that document, even though it's not signed by UpWork itself, together with the "Despacho_22600-2009" (that says about the possibility of the document not been signed because companies usually refuse to sign to people outside their country) and the USA-Portugal Convention Agreement, you are free of withholding and so you don't need to declare in Portugal that part.

 

We need to see UpWork as kind of a "Secretary". Imagine this situation:

- You have your office and you hired a secretary to be there. Her job is to find projects for you to work on and she requests a comission for each job you get (and she can even do more if you pay a Membership fee and she sends your applications after reaching the limit available per month, for even some more) and this is the way "she" gets her Income!

But the law says that people Income have associated taxes (some for finances and some for when you need).

For when you need is, for in case you get sick, or you get old and can't work and so on and so on... then you need money that the governament will give to you if you "witholded" during your working time.

 

I don't know if UpWork will ever read this also, but maybe like that their Accounting Team would understand better why people need certain documents and why UpWork should allow theyr Support Team to have it, so their could five it under request.

 

Other wise, UpWork could do 1 or 2 things, like renew the Accounting Team to have members that understand about the rules of the countries they work with or hire Freelancers that know about it and have the skills about it to help their existing team.

 

Just an idea! 😄

 

Ana Margarida, jokes asside, I hope I did help you and I am sorry if it wasn't in time but I completely passed by the community email without looking twice.

 

Have a good time here at UpWork. It's a great platform but in need of some "upgrades" (just my opinion).

tomzilla1
Community Member

Hire an accountant or buy a tax software.

Hey Tom Z Can you pls suggest any good accountant who can handle all this burden?

 

Thanks

The tax software doesn't know everything about international accounting rules, and many accountants also.

Another thing... because it's international (even though it's not that complicated for the specialists) they ask a lot of money for the service and a Freelancer in the biggening of his/her career can't afford that! But need to do his/her legal obligations anyway.

 

Hi Marta, can I ask you for a consultation on this subject? 

Really need your help because I'm confused.

 

My email is **Edited for Community Guidelines**

 

Thank you!

6bfcdaf8
Community Member

I reside in Turkey and we have the exact same challenges. And upwork is not our employer, they are just a comissioner. So they have zero responsibilities about how we calculate or pay our taxes. Governments seem to have no interest in making it easy either. Who said an independent life would be easy? We have to find an accountant amongst many, that has worked with and specialized about similar cases.

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