Invoices

[crispoluigi]

What if I want to Invoice for the work done through UPWork, assuming I have a limited company where I am the sole owner?

How this is handled?

[michael_skaggs]

Whenever you submit work for a fixed-price project/milestone, or you finalize your hours at the end of a work week:

1. UpWork invoices the client.
2. Client pays Upwork.
3. Upwork pays you (minus their fees).

[artemtoderian]

So I invoice UpWork?

[jr-translation]

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Artem T wrote:

So I invoice UpWork?

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No, you can download the invoices Upwork issues to the client and to you here.

[artemtoderian]

Ok, but how to deal with Italian law when we have to maintain my unique invoice number, fiscal number and template model to present at the end of the year to the Italian Revenue Agency?

I reffer to this information:

• Italian VAT invoice requirements
• Italy – Numbering of sales invoices – VAT Resource
• How to write an invoice in Italy

[52493b70]

How freelancer can issue me as a customer an invoice  with VAT id?

[AveryO]

Hi Luigi, 

It looks like you are new here. I would definitely recommend that you read up on the help articles I will note below to have an idea on how the system makes it easy for you "send an invoice/bill" your client. 

• Get Paid for Hourly Contracts
• Get Paid for Fixed-Price Contracts
• Weekly Billing Cycle - this help article gives you an idea when you should expect to receive your Upwork earnings through your Upwork account. 

I would recommend that you read up on these freelancer resources and these tips for avoiding questionable jobs, for help getting started, and for more information about working safely through Upwork. 

[crispoluigi]

Thanks Avery,

my question was different, is not how I get paid is how I manage to invoice to get the payment recorded in my balance sheet.

As said assuming I work through a limited company owned 100% by me (pretty common in UK for example) should I invoice UPwork? how that works?

Luigi

[g_vasilevski · Accepted solution]

Hi Luigi,

For each transaction, an invoices will be created and you will be able to download it by going to Reports > Transaction History. To learn more about invoices check out this Help Article. Thank you.

[crispoluigi]

Thanks, this is the answer I was looking for.

Luigi

[32ed76e9]

Hi Luigi,

Can I ask you a question please?

[marafx]

This situation is far from being fixed. There are years of complaints and help requests falling on deaf ears or getting irrelevant responses or worse, out of topic.

[733f1683]

Hi Avery!

I'm new here and I wonder if you can help me to understand the legal side of invoicing. I want to order work and I need a valid VAT invoice for an EU company. Is it so that the freelancer is the contracting party that issues the invoice and Upwork is only the intermediating body that provides the platform? Or will I see Upwork as the contracting and issuing party on the invoice? If the freelancer is the issuing party, then it seems to be an agreement between my company and a private person and I wonder if the EU labor law applies and labor taxes need to be paid?

With best wishes,

Mart S.

[LuiggiR]

Hi Mart,

Thank you for reaching out. Freelancers you hire on Upwork provide the services you'll be paying for, and the invoices you receive, while facilitated through the platform, will come from the freelancers. Upwork works as a platform that allows you to connect with freelancers. 

Regarding your tax responsibilities, you can visit this page for general information that applies to you as a client. Still, it's best for you to consult a tax authority or advisor in your country for specifics. 

[733f1683]

Hi Luiggi!

Thanks for the clarification! The page you referred to did unfortunately not have EU-specific information.

I consulted with the local tax authority and they confirmed that companies who hire freelancers on Upwork run the risk of fines and penalties unless the freelancer is officially registered as an independent contractor in their home country. For example, here is an overview for Italy: https://www.deel.com/contractors/italy and https://www.deel.com/blog/how-to-set-up-as-an-independent-contractor-in-italy-ditta-individuale.

Note that in case the freelancer is not registered as an independent contractor, then in Estonia and probably in other EU countries, if the natural person provides the service and receives the payment for the provision of the service, then the owner of the app, i.e. the intermediary of the service, in this case Upwork, is obliged to declare and pay labour taxes, see https://www.emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/income-platform-wor.... The law went into effect at the start of this year, see https://news.err.ee/1609102034/taxation-of-employees-of-online-platforms-becomes-law.

Can you comment on this?

With best regards,

Mart S.

[AveryO]

Hi Mart, 

The invoice from Upwork to the freelancer for Upwork's service fee, membership, or Connects will contain Upwork's VAT number. We collect VAT on Upwork's services but do not act as the freelancer's VAT agent. A freelancer is responsible for any tax determination relating to the services rendered by a freelancer to their client.

Any EU freelancer who provides services to a client in the same EU member state should consult their tax advisor to determine if the freelancer must send a VAT invoice separately to that client. 

If a freelancer and client both have VAT numbers but the client is operating in a different EU member state than the freelancer, Upwork will print "VAT Reverse Charged" on the invoice from the freelancer to the client so the client can self-assess VAT. If a client is in the same EU country as a freelancer or has no VAT number, we cannot apply a reverse charge to the client's invoice, and the freelancer will be responsible for self-assessing VAT and issuing the client an invoice.

Upwork does not have an office, a subsidiary, or any other presence (referred to as a "permanent establishment") in the EU. As a result, we are not obligated to register in the EU for VAT under the normal rules. There is a special rule for internet-based companies like ours, and it requires us to register and collect VAT on any transactions with "consumers." Since the clients who use Upwork are not considered consumers in this case, we are not required to collect tax on our transactions with clients. Instead, those using Upwork as a client should self-report the amount of services purchased from Upwork using the reverse charge reporting mechanism. The reverse charge requires the client to report the VAT they should have paid but should not result in any additional tax payment.

Please contact a trusted tax advisor to learn more; we cannot provide tax advice and don't want to speak incorrectly about the topic. 

[733f1683]

Hi Avery!

I contacted the local tax authority directly and they confirmed that in Estonia, if a private person provides the service and receives the payment for the provision of the service, then the intermediary of the service, in this case Upwork, is obliged to declare and pay labour taxes, see https://www.emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/income-platform-wor.... The law went into effect at the start of this year, see https://news.err.ee/1609102034/taxation-of-employees-of-online-platforms-becomes-law.

It's about labour taxes, not VAT. You may want to bring this up with your tax compliance officers. I can also ask the local tax authority to contact Upwork directly if you prefer.

With best wishes,

Mart S.

[AveryO]

Hi Mart, 

I'm sorry for the delay. We tried to get as much information regarding your questions, but we believe this is best handled via a support ticket in case it needs to be escalated further. Feel free to update the same ticket thread if you have additional information you wish to share. 

Thank you for your patience!