Portugal

[oudanne]

Hi everyone,

Any Portuguese here?

It would be nice to know there is life on earth?anybody out there?

Gisela

(Lisbon)

[inespott]

Hello! This is my first post in the upwork community.
I created a profile a few months ago (before VAT fees were added) I use paypal (set to dollars) to transfer my upwork payments, which so far have been few and quite modest, so I just used them for online purchases.
But I want to start transfering it to my account and I'm wondering if i should stick with paypal, pay the conversion fee to euros and transfer it to my bank account. Or if I should start using LFT (which is the recommended way for Portugal according to Upwork) it's 2USD so maybe it would cheaper?  Then again isn't paypal the safest option?

Can someone help me out? Thanks!

[colettelewis]

Someone has just posted about this. Have a look here:

https://community.upwork.com/t5/Freelancers/Upwork-Are-you-kidding-me-Double-conversion-USD-EUR-USD/...

[mrdanielprice]

PayPal's conversion fees table thingy makes my head hurt.

How much does your local bank account charge you to convert foreign currencies? They may be a better option to PayPal.

For me, my bank charges me £5 if it's £99 and under (what I get once it's been converted) and then 25p (£0.25) for £100 or more and for each increment of £100.

I simply factor this cost into my rate/pricing.

[inespott]

It makes my head hurt as well but so does my Bank's fees regulations. It could be free or around 4 euros, it's not very specific with international transfers (and the chart is quite confusing as well) I guess I'll stick to paypal for now, at least with smaller payments. Thanks anyway!

[ludovicaoi]

Hey Inês - Portuguese neighbor here. 
My last reply was deleted because it was in Portuguese. 
Did you find any solution for your problem? Are you still using paypal or the LFT for the money you make on Upwork? Thanks! 

[inespott]

Hi (I guess my reply got deleted as well).
For smaller amounts I stuck with paypal because I make some online purchases so it's pretty useful.
But I talked to a friend of mine who also as an upwork account and he said he always used LFT and that worked well for him. And so, for a bigger payment (around 200usd) I finally used LFT because I knew I wouldn't spend that much online and I would rather keep that in my bank account. Besides Upwork Fees, I "Lost" about 10€ when the transfer went through. which was what I was expecting so it worked well for me! I'm still unsure about paypal fees for transfers (specially for bigger amounts) but I plan to stick with paypal for smaller payments and LFT for the bigger ones, so that's what I would advise. But that of course depends on your bank (I'm caixa geral de depositos) or if you buy a lot of stuff online (paypal might work great for all kinds of payments in that case).

Hope this helps!

[diogo-sanches]

Direct Transfer from Upwork to your bank account is just $2, now. And you receive the entire amount that Upwork tells you gonna receive.

Plus, the upwork conversion rate is always better than the Paypal one, so it's almost always a better option.

[vladag]

Hi Diogo,

To clarify, Upwork charges $0.99 per withdrawal Direct to Local Bank, in case you were referring to the fee charged by Upwork and not the possible incoming bank fees local banks might charge for these transfers.

[sofiadomingues]

Hi all,

Another portuguese here. I was trying to add my payment method now but I don't get the 'local bank' option... Only paypal, payoneer, US Bank and wire transfer...

How can I do it??

Thanks

[vladag]

Hi Sofia,

I see you already set up Direct to Local Bank withdrawal method on your account. 

[graphicdesign914]

Hi! Why don’t you just transfer the money to your bank account directly? That’s how I do it. It costs 0,99$ and you get a normal conversion rate to euros, without any exchange fees.

[tiagomagalhaes]

Open up a Transferwise account. You can get an American account and bypass that fee and maybe get more favourable transfer fees

[melamedrenat]

Hi Gisela,

I'm not Portuguese but I currently live in Lisbon.

Best,

Renat

[vladag]

Hi Gisela and Renat,

Thanks for posting in the Community, Portugal is one of the countries I would like to visit some day. Could you please tell us more about the freelancing culture in Portugal and benefits/challenges of working as a freelancer from your personal experience?

[smcsilva01]

Hi Gisela!

I'm from Porto, you are not alone here 🙂

best,

Sérgio

[sofiaralmeida]

I'm from Portugal. I signed in a few weeks ago, but jut started now.

[krysteleal]

Hey! I'm from Portugal (margem sul, Lisbon area), but currently I'm living in California 😄

Portugueses por aqui?

[gurruwiwi]

Hey-ho everyone! 

Another "tuga" here, from up north Porto. 

Vladimir, freelancing in Portugal used to be a great thing about 10 - 15 years ago. Portuguese government invented a new tax policy that permitted anyone to freelance without setting up a company, legally charge clients by emitting a specific invoice (called "recibo verde"), thus declaring income for taxation purposes.

Unfortunately, this backfired majestically. 99,9% of companies started abusing the system and only started hiring people if they'd be under this model, even for full-time jobs. This is because they could simply not hire/fire that person again without any compensation or legal/social security penalties. Withing a few years about 40% of the country was technically a "freelancer".

Basically, they turned Portugal into a death-trap for freelancers. It's a real shame, the idea was awesome.

Things are not getting better. Any serious freelancer either sets up single-member company (which is extremely limiting) because their income is vastly superior to moronic taxation policies (up to 45%), or simply does not declare income to be able to pay for rent and food.

It really is a hostile environment. You definitely can position yourself to be a 100% legal tax payer, but it completely nulls any sense of entrepreneurship. Either your business works out great right off the bat, or you've just dug a huge hole you'll probably never recoup from.

Obviously, this is not the full story, I'm talking about 100% legit freelancing status. If one has a contract with a company that takes care of your IRS and Social Security obligations, then it's pretty much the opposite, you are free to collect as much as you want without major issues. Stupid and silly. Freelancers have to deduct much much higher taxes than medium to big sized companies. It's ridiculous. Like an inverted incentive pyramid... ugg ... 😞

Result? Massive corruption and fraudulent IRS declarations.

But Portugal, as a country, is simply amaaazing! You should definitely come by, and when you do hit me up so I can set you up with a kickass tour of Porto 😉

[vladag]

Hi Tiago,

I'm sorry to hear about the downsides and obstacles freelancers in Portugal are facing. Thanks for the insight and the offer, hopefully I'll have the opportunity to visit Portugal since that's on my wish list.

[diogo-sanches]

Another Portuguese here, from Lisbon. 🙂

[fernandeshelena]

Hi!
I know this post is a bit old - but could you briefly tell me how you report upwork income to the portuguese tax system? I have open activity (I don't have a single-person company though), but every time I try to search this I feel like I'm left with more doubts.

[eabreu90]

Hey another Portuguese from Braga :D.

**Edited for Community Guidelines**

[helga-lima]

Hey! Another "bracarense" here! Cheers!

[kochubei_valeria]

Hi All,

Just a quick reminder that posting in languages other than English isn't allowed by the Community Guidelines.

Thanks!

[oliveira-joana]

Hi!

I'm from Lisbon!

I was wondering if anyone here reports there income to the "finanças" and how do you do it? I am trying to do things right but it's not easy 😉

[mhuzifa]

Not Portuguese but currently living in Lisboa ❤️😊

[chiarasi]

Hi guys, I’m new to Upwork and I’m trying to figure out how to invoice my clients.

My accountant says that if Upwork invoices my clients for the total amount they have paid, I’m supposed to send an invoice to Upwork for the sum I’ve  actually received, without considering the 20% fee.

Anyone from Portugal who can confirm this?

[bcondez]

Hey guys!

Yeah, I also need help on this. I think I've been doing it wrong and need to know how you guys are reporting your taxes, and when, since this is not a "normal" way to work for freelancers, and with all the "forms" on the site, I'm kind of lost.

Thanks

[krysteleal]

Hello,

As a freelancer with activity open in Portugal, I'm doing this for the past 2 years (without any problem and after talking to 3 different local accountants):

I have my professional VAT number associated to my Upwork Account. I invoice (recibo verde eletronico) the full payment that client pays (fees included) on my "Portal das Finanças". Then, I declare the Upwork fees as expenses of my professional activity (with that, I don't pay taxes on the whole amount).

The invoice needs to be done for the client (not to Upwork, because Upwork is not our client, but the service provider). We need to issue our invoices to our clients. And the invoices need to show the same amount as the invoices Upwork issued (available at Settings > Get Paid > View Payments / Transaction History).

More about our taxes in Portugal: https://www.nomadismodigital.pt/freelancer-em-portugal-impostos/

[bcondez]

Hi Krystel

Thank you for your reply.

How about the VAT payments? I know it depends on how much you earned the year before, but below 10k€ I don't have to pay VAT, correct?

Regardind the Social Security payments, they have to be made every month, right?

Thanks for your help

[krysteleal]

Hello Bruno,

Yes, below 10k you don't need to pay IVA/VAT. And also, below 10k you don't need to make the "retenção na fonte da segurança social": you only need to pay the Social Security with your annual taxes in April/May.

If you have more than 10k/year, you need to pay your Social Security monthly.

[oliveira-joana]

Hi Krystel!

Thank you for your post, it's really helpful.

Could you please share with us what do you insert in the field of the "NIF" of the Client? Do you ask for this information to each of your clients?

And what do you do about the IVA?  

Thank you in advance

[krysteleal]

Hello Joana,

In the invoices that Upwork send us (see them on the "Get Paid" page), you sometimes have the VAT number of your client, as like their address and country. You use this information to fill the "Recibo Verde Eletrónico."

If you don't have the VAT number of your client, in the NIF field you insert: "-----" or "consumidor final." Never enter "999999990", as we sometimes read on the internet. This information is only for internal use by the SAF-T(PT).

For the IVA, if you have a valid VAT number on your Upwork account, Upwork doesn't charge you IVA. But if you are no longer within the exemption period ("Regime de Isenção") and you paid IVA, when you'll create the "Recibo Verde Eletrónico," you'll need to insert in the IVA field the "Regras de Localização – art. 6o (regras específicas)". With this, the IVA will be calculated at the rate of your customer country and will not pay the IVA - but you'll need to insert this information in your "declaração periodica de IVA."

If the client is Portuguese, you need to choose the correct IVA for Portugal. So, in addition to the 20% fee of Upwork, you'll need to pay the IVA for Portuguese customers, so have this on attention when you send your price/proposal.

The ebook "Como Ser Freelancer" by Nomadismo Digital Portugal has a chapter about this financial question for Upwork members if anyone wants to check: https://loja.nomadismodigital.pt/ebook-como-ser-freelancer/

[oliveira-joana]

Thank you so much Krystel!

[oliveira-joana]

Hi again Krystel!

I have another question that maybe you could help me with. How do you define the dates: "prestação de serviço date" vs "Invoice date" in the "recibos verdes"?

I know that legally in Portugal, we have 5 days to make an invoice after the date of the "prestação de serviço" and that in the invoices that Upwork sends us there is a date. Should this date of the upwork invoice be the "prestação de serviço date?" if so, is the correct date the "DATE" or the "DUE DATE"? 

The issue is that usually I don't have the money in my account in the 5 days after the date of the upwork invoice. Sometimes we don't even have the invoice in the next 5 days after the date that the invoice will report. How do you work around this? 

I have my payments scheduled monthly, would I be able to continue to do that?

I thank you in advance for your help!

Joana

[j_marques_lopes]

Hi Krystel,

I have a question regarding the fees we pay to Upwork. How do you declare them as expenses of your professional activity? I was supposing we would need to declare them as made abroad, but that is only possible for other types of things (education, health, etc.). I can only find a way to declare this type of things if made in Portugal, but that is probably wrong in the case of Upwork. Is it? Do you do it that way and use Upwork's VAT number in the NIF field?

Thanks in advance,

José

[71f0e1fd]

Hi!!


I just realised i dont have my VAT approvated because i have not initiated my activity, meanwhile i just transfered money already to my bank....

How can i solve this? Any suggestion? 😛

[krysteleal]

Hello Luís,

You need to fill the Form W-8BEN: https://support.upwork.com/hc/en-us/articles/211063938-What-is-the-Form-W-8BEN-

After that, you do not need to worry about your VAT Number. Since you do not have a VAT Number (because you do not have activity in Portugal), Upwork will charge the VAT/IVA (23%) directly to your payment so you do not have to do anything.

When you have a valid VAT number, Upwork will not be responsible for this deduction, since the freelancers/trabalhadores por conta própria are obligated to declare all their income to the Finanças.

[vladag]

Hi Krystel,

Just following up to clarify one detail regarding your statement in the following comment, which you most probably made in error since it appears you're aware that the VAt is applied only on the services Upwork provides, such as the service fee, Plus membership fee and for purchasing additional Connects.

"After that, you do not need to worry about your VAT Number. Since you do not have a VAT Number (because you do not have activity in Portugal), Upwork will charge the VAT/IVA (23%) directly to your payment so you do not have to do anything."