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Re: VAT / Invoice / Tax authorities

Active Member
Jorge S Member Since: Sep 28, 2017
1 of 16

Hi, I have a VAT question to remit my invoices to the tax authorities. In my case, in Spain each 3 months I have to declare my VAT (IVA). My doubt is if I receive an invoice from Upwork of 110$. Afterwards, they will charge my the service fee and the corresponding VAT. But my question is if that 110$ invoice includes VAT. In other words, the invoice even if it does not show VAT includes the applicable VAT in each country to the price? In this case with a 21% of VAT in Spain, they charge me that on the service fees. But do I have rest to that 110$ my VAT in order to remit it to the tax authorities? For a 110$ invoice, it will be then 90.90 + 21%VAT=110$ ? Can anybody help me please? Can I create a separate invoice that I remit to my client to simplify it?

Active Member
Jorge S Member Since: Sep 28, 2017
2 of 16

By the way, I do not have a VAT number. So I do not know if my client is already declaring the VAT for me or I have to declare it myself. 

Active Member
Jorge S Member Since: Sep 28, 2017
3 of 16

And in the invoices it does not appear any warning of VAT reverse charged, so do I have to understand that my client is paying the VAT for me?

Highlighted
Community Guru
Aaron Luigi L Member Since: Dec 28, 2014
4 of 16

Hi Jorge,

 

Thanks for reaching out.

 

Value-added tax, or VAT, is a tax that EU member states assess on the supply of goods and services. If you do not have a VAT number, you can continue business as usual, but Upwork will assess VAT fees to our service fee, as well as purchases of memberships & Connects and remit this tax to your tax authorities.

 

If you have a VAT number, please go to your settings page and click on ‘Tax Information’ option on the left menu to enter your VAT number. Upwork will not charge the VAT fee once your VAT number is validated, you will have to remit your own VAT to your local tax authorities in this case.

 

Also, your client is not responsible for your VAT. You can use this link as reference. Thank you.

- Aaron
Untitled
Community Guru
Scott E Member Since: Jul 26, 2015
5 of 16

Your NIF is your VAT number. 

"Welcome, humans. I'm ready for you!"
- Box, Logan's Run (1976)
Ace Contributor
Noelia B Member Since: Apr 25, 2017
6 of 16

Hello, Jorge, 

 

 

1) Invoices from us to the clients (not to Upwork, always to the Client): there are 3 possibilities to include them in the "MODELO 303": 

     a) Clients outside Europe: Exempt from VAT

     b) European clients registered in the VIES/ROI: Exempt from VAT (you should also be registered in the VIES/ROI)

     c) European clients not registered in the VIES/ROI: VAT applicable at 21% 

       

 

2) Invoices from Upwork to us (service fee): 2 options: 

    a) if you are registered in the VIES/ROI, then you declare them in the "MODELO 130" as an expense exempt of                VAT (since Upwork won't charge you VAT).   

 

    b) if you are not registered in the VIES/ROI, then you declare them in the "MODELO 303" as an expense subject to          VAT (since Upwork will charge you VAT).

 

From what you say, I am not sure whether you earned $110 from one or more clients or have paid $110 in fees to Upwork.  

 

If you have earned $110 from a client under 1. a) or 1. b), then it is just 110, no VAT

If you have earned $110 from a client under 2. c), it is VAT included: you should declare it as 90.90+VAT.

 

If you have paid $110 to Upwork under 2. a), there is no VAT charged to you. 

If you have paid $110 to Upwork under 2. b) it is 90,90+VAT (it should be stated in the invoice)

 

 

 

I hope it helps, 

 

Noelia B.
Active Member
Jorge S Member Since: Sep 28, 2017
7 of 16

Thanks a lot! So if I understood well, what I receive from my client via Upwork (110$, for instance), I will declare it just if we are not both in VIES/ROI?

 

If it is an European client not registered in VIES/ROI, I should create an invoice and send it to my client as 90 + VAT  = 110 - IRPF?

 

If we are both registered, payments received from the client via Upwork are exempt of declaring VAT and the invoice will be 110-IRPF?

 

Thanks again. I do not want to have problems with tax authorities that is why I want to make sure I am doing everything correctly.

Ace Contributor
Noelia B Member Since: Apr 25, 2017
8 of 16

Jorge,

You declare it either way. 

 

Every quarter you should declare everything:  

1.- income exempt from VAT  (303)

2.-income subject to VAT  (303)

3.-expenses exempt from VAT  (130)

4.expenses subject to VAT (303 and 130)

 

I do not send the invoices to the clients because they already have them from Upwork. I keep them for my records.  

 

That way, you have everything you need in case there is an inspection. Well, the only thing we do not have is the VAT number of those clients not registered in the VIES: they do not appear in the Upwork invoice, I do not know why. I already asked Support about this and nobody gave me a proper answer. We could ask clients for their VAT no. but chances are they feel awkward about this...  

 

IRPF is deducted when you invoice a company or another freelancer in Spain, no need if they are outside Spain.

 

 

Anyway, I think it is always a good idea to contact a fiscal adviser, just in case and to make sure you 

are doing it right Smiley Happy 

 

Noelia B.
Active Member
Jorge S Member Since: Sep 28, 2017
9 of 16

Thanks for that, it was really clear. My only doubt and for the one I may contact again the with tax authorities is if both client and freelancer are in Spain and in VIES/ROI the VAT exemption applies. What do you think about that? Thanks again! Jorge  

Ace Contributor
Noelia B Member Since: Apr 25, 2017
10 of 16

VIES/ROI is applicable in Europe BUT OUTSIDE Spain.

 

If both Client and Freelancer are based in Spain, VAT always applies. 

 

Captura de pantalla 2017-09-29 a las 20.00.05.png

 

Noelia B.
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