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Upwork has no shame

suzedablooze
Ace Contributor
Susan M Member Since: Feb 9, 2015
31 of 69

Irene, you bring up a good point.

 

In the UK you only charge for VAT if you are registered for VAT. Something you don't bother with if you earn less than a certain amount (becasue it's a right royal pain to do the returns).

 

If Upwork is 'charging on my behalf' i.e. collecting VAT using my product (writing) does that mean I now have to register for VAT?

 

I bleep bleep bleep hope not!

 

Could someone from Upwork clarify this point please?

 

 

turbocro
Community Leader
Igor S Member Since: Apr 8, 2015
32 of 69

I own small business in Croatia and doesn't have to charge VAT to my clients since I'm not is system (I don't earn over limit my goverment provided as limit to enter VAT system). I do pay fixed amount of money for taxes each month regardless of that until I get over limit, then I'm obligated to enter VAT system in my country.

 

So I'm really not sure how are you now legaly going to charge my clients VAT when I don't have to according to law from my country? Your invoices to client will not be legally right since I'm not alowed to charge VAT to clients. Since EU is mix of many different tax laws for each of it member I think that you really need to find and expert from each contry and discuss with them before implementing this.

 

 

 

 

alupu
Active Member
Andrei L Member Since: May 6, 2015
33 of 69

Thank you Igor for specifying that. That is exactly like in Romania and I am pretty sure all over Europe, more or less. I am not legally bound to charge VAT so I do not, LEGALLY SPEAKING, own VAT to Romania. As such, Romania will refuse the Upwork 's collected VAT and that money will stay with Upwork. It's just another way for Upwork to raise fees under stupid pretences

 

bennett-kathrin
Ace Contributor
Kathrin B Member Since: Jul 20, 2012
34 of 69

In Germany it's similar to France, if you earn less than a certain amount per year you are a "Kleinunternehmer" and don't have a VAT number or pay VAT, in fact you are not even allowed to charge VAT on your invoices to your clients. 

 

If upwork starts to pay VAT to my tax office in my name, I am pretty sure they will not have the faintest idea where it is coming from and, worst case, will ask ME to explain what is going on. 

 

Valeria, can you please check on the situation in my country, too. As you can see in this thread, whether we have to pay VAT differs from country to country and depends on what we earn. Is upwork aware of the fact that they will have to check and understand the legal and tax regulations for every single EU country, and then, depending on their earnings (and I mean total earnings, not just those made on upwork) of every single EU freelancer if they want to do this correctly?

battershall-ramo
Community Guru
Ramon B Member Since: Jan 11, 2015
35 of 69

I know what Nigel Farage would say. He'd say "It's political correctness gone mad! The P.C. bureaucrats at Brussels have forced this on  the hard-working taxpayer like they forced their bendy bananas on us!"

vicnaum
Active Member
Victor N Member Since: Mar 29, 2010
36 of 69

There is a confusion here in this thread.

 

You can opt-in or opt-out of VAT in EU if you're selling something - that means, you can add VAT (with preference of returning others VAT they sell you with their products) or not (then you can't return VAT from the products you buy). Of course there are some mandatory conditions to fit into (income should be less than some $$ amount, goods shouldn't be of some specific categories, etc).

 

But mostly all products in EU contain VAT. When you buy something in a shop - it contains VAT. And also - if you order goods from outside of EU - they should add VAT, or you should pay it yourself - if you are in EU, and you buy songs on american iTunes, or if you buy hosting in Australia - legally that should come with VAT added too.

But you can return it, if you register yourself as a VAT-payer.

 

The most tricky part here, is oDesk throuwing 10% commision from the client -> to freelancer. So now we BUY from oDesk - we BUY the possibility of work here, paying 10% to oDesk, from the money we never see (it's just numbers on the web-site balance). I assume, oDesk has done that trick, to get more clients here - to lower the mentioned price to client, to compete with other freelance websites, which can add their commision on client.

 

On oDesk client no longer needs to pay 10% commision, and doesn't even have to know about it.

 

But now the hell starts - we're buying from oDesk, we have to pay VAT from this, we shall TAX the full 90%+10% amount in our Tax Offices, and then reduce the expenses by 10% that we pay to oDesk, now this VAT thing. And then calculate TAXes with all that.

 

Overly-overly complicated!

 

zoomconcepts
Community Guru
Bojana D Member Since: May 2, 2011
37 of 69

@Victor N wrote:

 

But now the hell starts - we're buying from oDesk, we have to pay VAT from this, we shall TAX the full 90%+10% amount in our Tax Offices, and then reduce the expenses by 10% that we pay to oDesk, now this VAT thing. And then calculate TAXes with all that.

 

Overly-overly complicated!

 


What frustrates me the most is that they're trying to cover themselves on all fronts, charging VAT, dealing with their invoices and all, but they don't give us the courtesy of providing even basic documentation to help us do the same. For example:

 

  • Upwork does NOT allow me to see the invoices they send on my behalf to the clients (and these are pretty much illegal in my country anway, noone can invoice on my behalf according to our laws).
  • Upwork does NOT allow me to enter my comapny's tax information properly, so I can at least use the invoices Upwork issues for their fees as proof os expense - right now they're issued to me as an individual, and my country's tax laws won't accept them as business expenses.
  • Now they're going to charge VAT - only in EU? Really? 1) I'm pretty sure VAT does not exist only in EU, and 2) it's definitely not a new thing, it's been around for quite some time. Why start now? Are you admitting you were operating outside thelaw up until this moment, Upwork? 
vicnaum
Active Member
Victor N Member Since: Mar 29, 2010
38 of 69

Yeah, thinking the same here - if we start playing "legal" worldwide, then let's go till the end - providing all the needed info, invoices & documents, hiring tax-consultants from each of the biggest participating countries (to help freelancers stay legal too), and making it clear.

vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
39 of 69

Hi Bojana,

 

Now they're going to charge VAT - only in EU? Really? 1) I'm pretty sure VAT does not exist only in EU, and 2) it's definitely not a new thing, it's been around for quite some time. Why start now?

 

As Upwork continues to grow, our international presence has expanded. To better serve the needs of our international customers, we are increasing services suited specifically for you. The first of these changes is to either print “VAT Reverse Charged” or to charge VAT on our invoices to EU freelancers and to remit those charges to EU governments as required. The second change will print “VAT Reverse Charged” on certain invoices from EU freelancers to EU clients to enable your clients to self assess VAT on your invoice to them, when applicable.

Untitled
jmeyn
Community Guru
Joachim M Member Since: Mar 23, 2015
40 of 69

@Vladimir G wrote:

Hi Bojana,

 

Now they're going to charge VAT - only in EU? Really? 1) I'm pretty sure VAT does not exist only in EU, and 2) it's definitely not a new thing, it's been around for quite some time. Why start now?

 

As Upwork continues to grow, our international presence has expanded. To better serve the needs of our international customers, we are increasing services suited specifically for you. The first of these changes is to either print “VAT Reverse Charged” or to charge VAT on our invoices to EU freelancers and to remit those charges to EU governments as required. The second change will print “VAT Reverse Charged” on certain invoices from EU freelancers to EU clients to enable your clients to self assess VAT on your invoice to them, when applicable.


Vladimir, the second step will require Upwork to give us freelancers access to the invoices issued  to the client on our behalf. We as freelances will require the clients' VAT IDs too as all this reporting via VAT ID serves for crosschecking within the EU.

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