VAT ID and "VAT reverse charged" on the invoice

[dhuzjak]

I am a freelancer, owner of a small business in Croatia.
I did a job for a client in GB.
We both provided our VAT ID.
On the invoice upwork sent to the client on my behalf, it says "VAT reverse charged".
Does that depend if I entered my VAT ID or clients VAT ID.
I.e. if I remove my VAT ID from upwork will there still be "VAT reverse charged" on the invoice to the client?

Second question:
How do I know if I did work for a legal entity or an individual? Can a individual have a VAT ID?

Also, do I absolutely have to enter a VAT ID if I actually have one? Or is this always optional?

[VladimirG · Accepted solution]

Hi Dario,

I see you have submitted a support request and our team will follow up on it soon. In the meantime, I'll respond to the questions you raised both here and on the support ticket.

1. On the invoice upwork sent to the client on my behalf, it says "VAT reverse charged".
Does that depend if I entered my VAT ID or clients VAT ID.
I.e. if I remove my VAT ID from upwork will there still be "VAT reverse charged" on the invoice to the client?

The "VAT reverse charged" stamp will appear on a client's invoice in case they provide their VAT number in their account, regardless of the freelancer's location. 

2. How do I know if I did work for a legal entity or an individual? Can a individual have a VAT ID?

You can communicate with the client directly and also contact a local legal adviser to confirm a client's legal status.

3. Also, do I absolutely have to enter a VAT ID if I actually have one? Or is this always optional?

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.

Let us know if you have any other questions.

[dhuzjak]

Thank you.
One more question.

On the invoice, upwork sent me with its provision it also states: "VAT reverse charged". Does that depend on me entering my VAT ID? So if I don't enter my VAT ID there won't be a "VAT reverse charged" on the invoice?

[kochubei_valeria]

Dario,

If you entered a VAT number, Upwork will not charge this tax but will print “VAT Reverse Charged” on the invoice you receive from Upwork and you may be required to self-assess VAT on your VAT return under the reverse-charge mechanism applicable to ESS.