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.
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
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/
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!
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,
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?
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.
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."
Another Portuguese, from Guarda! (The highest city in Portugal )
I'm not a freelancer, i have a job (Front End Developer) but i'm looking for some extra jobs to improve my skills.
I'm starting now but i'm having some problems with VAT number, can someone help me on this? The VAT number is our "NIF" right? Upwork is not accepting my number....
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