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Some clarifications, please. VAT / Payment.

mcluc
Ace Contributor
Lucian M Member Since: Jun 25, 2017
1 of 3

Hello,

 

I'm new to the community of Upwork. English is not my native language. I spend two days reading pretty much everything in FAQ and I still need some clarfications because this is a hole new world for me.

 

What is actually VAT ? From my understandings, is IRS related, right ? Fiscal / tax department to be more precise (if I'm correct here too). My country is part of Europe, but I don't have any VAT, therefore I need to register to IRS / fill some paper works from which my "IRS" should give me that unique VAT ID / Code ? I never had a job before so I believe I'm out of knowledge, hence I don't own a VAT. If I won't give the VAT ID in my profile that means the American Gourvement will tax me instead of my country, right ? I did filled the W-8BEN though.

 

Another question is payment. I finish a job and the person has to send me the cash. At the moment I don't own a bank card although I had made a paypal account. From what I read about Paypal is that the money can get transfer and then I can shop online. I have the Paypal in my "Get Paid" profile so I'm ready to go and apply for jobs, right ? I know that in order to withdraw my earned money I have to go and make a bank card, transfer the money from paypal in order to get them out through a cash machine with my card if I don't want online shopping. In the upcoming days, I will try to go to a bank and make one.

 

I'm so new with all of this, so sorry.

 

 

 

 

colettelewis
Community Guru
Nichola L Member Since: Mar 13, 2015
2 of 3

MC L

 

Everyone in the European community pays VAT on services. In Romania I believe it is 19%. You have to fill out the W-8BEN form if you are not resident in the US, which means you will never be taxed in the US, unless you go there to live.

 

If you do not have a VAT number and many European freelancers don't, then Upwork is obliged to charge you a service charge on the 20% you pay to Upwork for the services they provide and pay it to your country.

 

You do not need a VAT number to work from Upwork. However, you do need to check with the tax authorities in your country as to how it works for freelancers. 

 

As to a bank account, you will eventually need one. PayPal only has limited services on a personal account, and they will certainly ask for ID verification if you start sending regular amounts to your account without transferring to your bank.

 

Have a look here:

 

https://support.upwork.com/hc/en-us/articles/211061278-EU-Value-Added-Tax-VAT-

 

https://community.upwork.com/t5/Freelancers/VAT-for-Romanian-freelancers/td-p/300334

mcluc
Ace Contributor
Lucian M Member Since: Jun 25, 2017
3 of 3
Perfect. So I was on the right track understanding this subjects that are new to me. Well, I will go and see if I can get a VAT ID. If not, then I will be in the same group of others without it. I hope they will understand what is about, usually in my country the bureaucracy and lack of job knowledge is high, some employees might not know what I'm talking about. Thank you Nichola for the links and clarification.
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