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Romanian VAT changed

Active Member
Cristian-Alexandru C Member Since: Aug 31, 2015
1 of 6

Hello,

 

The Romania VAT value has changed since the 1st of january as the official law published in the Official monitor says. 

 

The law is: Legea 227/2015 art.291 alineat 1 litera a)

http://itva.ro/documents/Lege227per2015.pdf

 

What questions i have are:

 

1. When will this change come on Upwork?

 

2. What happens with the extra VAT i paid since the 1st of january till Upwork will change this value?

 

3. Upworks argument is that it's paying VAT on MY BEHALF to the Romanian state. What Cristian-Alexandru Ciuperca are you making payment for? What if the freelancers name is even more popular as Popescu or Ionescu? 

 

Thank you for your answers. 

Moderator
Vladimir G Moderator Member Since: Oct 31, 2014
2 of 6

Hi Cristian-Alexandru,

 

I see you already opened a Support ticket regarding these questions, so please keep communicating with our team on your open ticket.

 

Thank you.

Community Leader
Teri S Member Since: Oct 17, 2011
3 of 6

3. Upworks argument is that it's paying VAT on MY BEHALF to the Romanian state. What Cristian-Alexandru Ciuperca are you making payment for? What if the freelancers name is even more popular as Popescu or Ionescu? 

 

Thank you for your answers. 


 I can't answer your other questions, but I can answer this one. When a company registers the VAT it charges its customers and remits that money to the correct authorities, they do not need to send any names at all.

 

From Upwork's point of view, they are charging you VAT in exactly the same way that any store you shop at in Romania charges you VAT when you buy their products (assuming the product is VAT rated, of course).  You don't generally have to provide your name when you buy clothes or computers in a store, do you? So, obviously the store doesn't need to report your name when they remit the VAT you paid to the tax authorities. It's exactly the same with Upwork. They don't need to report who paid the VAT, only how much was paid.

 

Hope that clears it up Smiley Happy

 

 Edited to add:

It's slightly different for those freelancers who have a VAT number registered with Upwork. In that case, they don't pay the VAT to Upwork, but Upwork does send their VAT number and the amount of VAT due to the tax authorities. The freelancer then needs to report and pay that VAT directly to the tax authorities.

Active Member
Cristian-Alexandru C Member Since: Aug 31, 2015
4 of 6

Whell i pay VAT in the country i make the transaction right? In this case shouldn't i pay the VAT of California were Upwork is registered and with whom i make the transaction through?

 

Community Leader
Teri S Member Since: Oct 17, 2011
BEST ANSWER
5 of 6

@Cristian-Alexandru C wrote:

Whell i pay VAT in the country i make the transaction right? In this case shouldn't i pay the VAT of California were Upwork is registered and with whom i make the transaction through?

 


That would seem reasonable, yes. When you cross a border in the EU to buy something, you pay the VAT of the country you are in. Unfortunately, with automated electronic services like Upwork's there are different rules. The EU decided that VAT on these services belongs to the country where the service is used, not sold. So if you were to buy an automated service from another EU country, you should pay Romanian VAT.

 

Ånd since you are in Romania when you use Upwork's services, it is Romanian VAT that needs to be paid, ultimately to the Romanian government.

 

As of January 2015 it doesn't matter where in the world Upwork is located. The law changed so that if they sell their services to people in the EU they must collect the correct VAT from EU-based users and pay it in to the relevant tax authority.

Ace Contributor
Cristina P Member Since: Apr 19, 2015
6 of 6
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@Cristian-Alexandru C wrote:

Whell i pay VAT in the country i make the transaction right? In this case shouldn't i pay the VAT of California were Upwork is registered and with whom i make the transaction through?

 


 

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