Ukraine Tax – VAT Collection to Start in January (Update: on February 14): Feedback and Questions

[#1]

Starting early next year, we will begin collecting Ukraine’s Value Added Tax (VAT) when talent and clients registered in Ukraine purchase Upwork services. Ukraine signed a new law on June 29, 2021 requiring Upwork to collect VAT for certain transactions.

Check out the announcement here and let us know your thoughts about these updates in the comments below.

[#2]

Most ФОП don't have it. basically tax on everyone.

[#3]

Registered FOP here, and there's no 12-digit number.  Only the 10-digit thing.  Will have to check with my bank tomorrow and see what this is all about!  I already pay taxes and monthly fees for FOP, so this new tax thing is just confusing!

[#4]

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[#5]

Hi there! I'm from Ukraine and just got Upwork notification that I have to add my VAT number. The issue is I have 10-digit number (and I believe all Ukrainians have 10-digit VAT number), while Upwork asks to enter 12-digit number.  So my 10-digit VAT number is invalid. Does anyone know what should I do? Thanks in advance!

[#6]

Hello, I have got this error message when adding my bank account to Upwork. Payment method verification in progress Your payment method has been deactivated because the beneficiary name on your payment method does not match the name on your Upwork account. Please visit our FAQ page for additional information. Please Solve !

[#7]

Having a simliar issue and just wanted to close my account.  I hope you get a solution one of these months...

[#8]

Hello james. The issue was solved you have to check your verified name that appears on your contract that's matching the account name when adding your bank account on upwork. Try it !

[#9]

Hi All,

Apologies for the delay in providing more information about this change. The announcement about it can now be viewed here.
I'd like to note that as this tax is being collected on B2C (business to consumer) transactions, any user that has provided Upwork with a valid VAT ID will not be treated as a “consumer” and therefore will not be subject to tax. You can add your VAT ID in the Tax Information section of Settings. A VAT ID, rather than a 10-digit personal Tax ID, is required in order to be exempted from this tax collection.

I have moved this discussion here and have shared  yourfeedback about the options available when adding your VAT ID number to your Upwork account with the team. They will be working to address that in product.

[#10]

Hi Valeria, 
Could you please let us know the amount in percentage that will be deducted off the freelancers' service fees by Upwork?
Thanks,
V.

[#11]

Hi Vadym,

We are required to collect 20% of freelancer service fees, Connects purchases, and membership fees.

[#12]

Hi Valeria! But if I (and huge number of ukrainian freelancers) don't hae such ID? I have just and individual 10-digit code. I'm not a business, not a legal entity and I have no any ID except this 10-digit individual ID (that in Ukraine is counted like a ID of person who pay taxes). So what is the next step?

[#13]

With the google tax law, they have to pay taxes like a Ukraininan VAT (PDV) company, this +20% on their earnings.

[#14]

So in total, we can just skip that VAT? because I have the same situation as Daria, and if we will not add the VAT id we will pay an extra 20% from fees and purchases? And what about the notice?

[#15]

Unless you already pay VAT, you will have to pay this one. Upwork has to add 20% VAT (pdv) on everything they earn.

[#16]

If you have FOP that pays 3% + PDV, you'll have a valid VAT id that you can use. Most freelancers use the 5% with no PDV (and have to pay more fees on upwork)

[#17]

---

Valeria K wrote:

Hi All,

Apologies for the delay in providing more information about this change. The announcement about it can now be viewed here.
I'd like to note that as this tax is being collected on B2C (business to consumer) transactions, any user that has provided Upwork with a valid VAT ID will not be treated as a “consumer” and therefore will not be subject to tax. You can add your VAT ID in the Tax Information section of Settings. A VAT ID, rather than a 10-digit personal Tax ID, is required in order to be exempted from this tax collection.

I have moved this discussion here and have shared  yourfeedback about the options available when adding your VAT ID number to your Upwork account with the team. They will be working to address that in product.

---

If it's not a personal Tax ID number, where do we need to find this 12-digit VAT ID?

[#18]

Register as a FOP that pays PDV.

[#19]

FOP in Ukrain has not 12 digits VAT ID number. I've added all my company bookkeeping department, I've asked Privatbank assistance - nobody know what is 12 digits VAT ID number in Ukrain. I'm FOP since 2008 and have no 12 digits VAT ID number.

[#20]

add 00 before a 10 digit VAT number if you have an old variant.

[#21]

Hi Valeria,

Just want to let you know nobody in Ukrain has 12 digits VAT ID numbers. All of us has 10 digits VAT ID number!

Sincerely,

[#22]

Hi Mike, 
Could you please let us know the amount in percentage that will be deducted off the freelancers' service fees by Upwork?
Thanks,
V.

[#23]

6-12-24

[#24]

I have a 10-digit VAT ID because I was registered as a VAT payer before 09/03/2020.
How can I write 10 digits instead of 12 digits?

**Edited for Community Guidelines**

[#25]

Unfortunately there is no way. We all will pay extra 20% from Upwork fees, buying connects etc.

[#26]

The State Tax Service clarified that the individual tax number for individuals registered as VAT payers until March 9, 2020 will not be changed. For such persons it will be 10-digit until the moment of cancellation of their VAT registration.

That is, the individual tax number in the new 12-digit format will be assigned during VAT registration of natural persons-entrepreneurs starting from March 9, 2020.

The tax authorities explained this by saying that the individual tax number is kept by the VAT payer until the moment of VAT registration cancellation, and laws and other normative legal acts do not have retroactive effect (Article 58 of the Constitution of Ukraine).

It will be recalled that a new algorithm for generating an individual tax number was introduced by the order of the Ministry of Finance of January 29, 2020 № 30, which amended the Regulation on registration of value added taxpayers approved by the order of the Ministry of Finance of November 14, 2014 № 1130. tax number for individuals is a 12-digit numeric number of the following structure:

- 1 - 10th marks - registration number of the taxpayer's account card (or passport number - for natural persons-entrepreneurs who due to their religious beliefs refuse to accept the registration number of the taxpayer's account card and notified the relevant supervisory authority and have a mark in the passport );

- 11th and 12th signs - control digits, the algorithm of formation of which is established by the State Tax Service of Ukraine.