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alex_fieraru
Community Member

Taxes autmatically deducted from payment

Dear Upwork,

 

I've noticed that each payment I get from Upwork I pay a dollar amount of tax for which is automatically deducted from the original balance. I am not a US citizen hence I pay my taxes locally in my country. Can I be reimbursed please? otherwise I would have to pay taxes twice! In the USA and in Romania which makes no sense of course. Thank for your help!

7 REPLIES 7
petra_r
Community Member


Alex wrote:

I've noticed that each payment I get from Upwork I pay a dollar amount of tax for which is automatically deducted from the original balance. I am not a US citizen hence I pay my taxes locally in my country. 


What is deducted is not income tax. The main thing that is deducted is the Upwork fee, and then you pay VAT on the upwork fee, in exactly the same way you pay VAT on things you buy in shops in your own country. It is purely VAT on the fee, on connects you buy and memberships for example. That money is handed over to your country, Upwork only collects it on their behalf.


Income tax is what you pay on what you earn in your own country. It has nothing to do with the Upwork fee or the VAT on the fee, connects and membership payments.

 


Can I be reimbursed please?

No, because you have not been charged any taxes.

martina_plaschka
Community Member


Alex F wrote:

Dear Upwork,

 

I've noticed that each payment I get from Upwork I pay a dollar amount of tax for which is automatically deducted from the original balance. I am not a US citizen hence I pay my taxes locally in my country. Can I be reimbursed please? otherwise I would have to pay taxes twice! In the USA and in Romania which makes no sense of course. Thank for your help!


The VAT is paid by upwork to your local tax authorities in Romania. You pay this on a service that you buy, e.g. connects or the service fee from upwork. If you don't want to pay VAT, you need to get a VAT number from your tax authority, input it into your profile, and then no VAT will be charged. 

NikolaS
Moderator
Moderator

Hi Alex,

 

Thank you for reaching out to us. Could you please clarify if you are referring to VAT charges in your Transaction history? If so please know that Upwork charges VAT to freelancers and agencies in certain countries unless specific exemption requirements are met. Upwork is required to collect this tax and pay it to the appropriate government agency. 

 

Please check this help article to further understand how VAT applies to you. You may also want to consult your tax advisor with questions that relate to your specific situation.

 

~ Nikola
Upwork

Hi NIkola,

My company specifically has VAT exemption because we're a service-based company based out of Romania and we do NOT pay VAT on the services that we provide to our customers. and yes I'm referring to the VAT charges in my transaction history.  can you please advise how i can request upwork not to deduct this amount? Our accountant has specifically requested NOT to have this VAT amount charged. 

I've entered my VAT information in the dashboard but I then got a message that it could not be verified.
i don't quite understand why that is because my VAT number is 100% correct

Hi Alex,

 

You can verify the validity of a VAT number by entering it in the VIES database. If your VAT number is valid in the VIES database but you can't add it on Upwork, let me know.

Upwork charges the country-specific Value Added Tax (VAT) to freelancers and agencies in the European Union (EU), unless you provide a valid VAT number. Thank you.

~ Goran
Upwork

Dear Goran,

Thanks for your reply! If i add the VAT to my profile it will get rejected.
please find attached the overview from VIES

Hi Alex,

 

One of our team members will reach out to you via ticket as soon as possible and will assist you further with your VAT number. Thank you.

~ Goran
Upwork
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