It's optional. Upwork won't charge VAT to anyone who has provided a validated VAT number but will charge VAT on the services to freelancers and agencies within the EU unless they provide a valid VAT number. You can find more information here.
When a client hires and pays a freelancer on Upwork the payment is first released to the freelancer's Upwork account. Then the freelancer can withdraw their earnings to their chosen withdrawal method. That said, the contract is still made between the client and the freelancer and the invoice is sent to the client on the freelancer's behalf. Here is a help article for reference.
Rosaly V wrote:
I just had my VAT number and I plan to input it on my Upwork account soon and change my bank account details in my “get paid” at the same time, I’m curious if all my previous earnings will be declared by Upwork also or not really? Will it be only the new earnings? I’ve read that Upwork won’t charge VAT anymore if you provide a valid VAT number that’s why I pursue to get one.
Oh, another concern is about the invoicing. Normally in real situation, I should provide an invoice so I will get paid right? How does it work with Upwork if I’ll input my invoice?
Hope someone can help. Thanks!
VAT is a transactional tax that is charged on any goods and services, it has nothing to do with your earnings. You will still have to pay income tax on your earnings, depending on your other income, expenses, and all other considerations in your jurisdiction.
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