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]

When you go to Silpo or every store, you'll see 20% tax that you are paying as the customer. Same as you as a freelancer will have to raise your rate to compensate for this change and your clients will have to pay for it. 

I'm just sad that they did this first, instead of taxing the freelancers that don't pay any tax at all, but I guess this way they will get more tax paid in general.

[#3]

I'm not sure I quite follow your second thought... Are you suggesting to raise our rates? If so, don't you think that clients would prefer working with the freelancers who charge less and simply wouldn't like to work with us?

[#4]

Upwork raised their fee rate, why shouldn't you? it's only 2-4%. At least raise your rate for new clients.

[#5]

You don't have reverse charge?

[#6]

Do I?
Anyway, please let me know the reason why you'd like to know that.

[#7]

Can we get a withdraw to a local bank in UAH option, please? Preferably, Privatbank. This way we could lower my tax group and be able to pay a fixed tax instead of %.

@Valeria K, you can contact them here **Edited for Community Guidelines** 

[#8]

Thanks for your suggestion, Viacheslav. We do offer Direct to Local Bank services in many currencies and our payment team is continuously working on ways to expand this option to more currencies. Unfortunately, it's not yet available in Ukraine. However, if it becomes available in the future, we'll definitely notify the Community about it.

[#9]

Hi!
I am also waiting for solving of this issue. I can't add my 10 digits code.
According to current tax law of Ukraine I am not a VAT payer, I have another tax group and I pay taxes according to it. So, I have not VAT code, I have only 10 digits identification number that I use in tax documents.
And I have no possibility to enter it in Upwork.
So... waiting for resolving this issue.
Thank you in advance.

[#10]

Hi Svetlana,

I'd like to clarify that a 10-digit personal Tax ID is not a VAT number and does not make you exempt from this tax. A 12-digit VAT ID or 8-digit business registration number is required in order to be exempted from this tax collection. 

[#11]

Hi Valeria. 

Can you please clarify whether I need A 12-digit VAT ID or 8-digit business registration number in order to work on the platform ? Because it is not crystlal clear.

[#12]

Hello,

Could you please explain a bit more about the new indirect taxes for Ukraine and the changes that should be done in the client account? I've read your article https://support.upwork.com/hc/en-us/articles/4410783603219, but it doesn't include anything regarding the billing methods. Should we change the billing method as well? Or the VAT number and address are the only things that must be entered? And how long does the VAT verification take?

Thanks in advance.

[#13]

Hi Olena,

You don't have to update your billing method unless you'd like to do that. We're providing clients and talent in Ukraine with an option to add their VAT ID in the Tax Information section of Settings. I'd also like to add that in order to avoid any possible issues, the client may first visit the Ukraine tax registry to validate that the information they will provide on their Upwork profile is accurate.

[#14]

Hi Valeria,

I still have issues while entering the VAT ID. I've tried to enter both the business ID number and VAT ID, but none passed your verification. Both are correct, and I have additionally checked using the link you provided above that I should use our LLC business ID number. 

But I've received the email from you about a country, name and VAT ID number mismatch. How could I reach anybody directly to check what should be entered?

[#15]

Hi Olena,

Our team reached out to you via ticket to assist you further. You can access your tickets on this link, thank you.

[#16]

Hi! I'm having such a problem. I need to enter my VAT ID on Upwork, but the thing is that the system asks for a 12-digit number. This is a mistake, there are no 12-digit individual VAT ID in Ukraine, it have 10 digits. What should I do with this?  Thanks.

[#17]

Hi Denys,

A 10-digit personal Tax ID is not a VAT number and does not make you exempt from this tax. A 12-digit VAT ID or 8-digit business registration number is required in order to be exempted from this tax collection. 

[#18]

Okay, but how am I supposed to get VAT ID? I don't have one

[#19]

Create ФОП 3 групи 3% з ПДВ

[#20]

Hello,

Please contact me via ticket to speed up the verification process.

I have provided a valid business tax ID, but colleaque has notified me that you also need the business registration documents. Or how can I contact your support team directly?

[#21]

Hi Bohdan,

Someone from our team will reach out to you via support ticket in order to assist you further.

[#22]

Hi ,

The Ukraine Tax ID is 10 digits and Upwork is requesting for 12 digits. What do I do? 

I am unable to process my payment details on upwork because of this issue.

Kindly advise

[#23]

Hi Royal,

A 10-digit personal Tax ID is not a VAT number and does not make you exempt from this tax. A 12-digit VAT ID or 8-digit business registration number is required in order to be exempted from this tax collection. 

[#24]

Hey! I work with the site and I received a notification that I need to provide a VAT ID to confirm that I pay taxes. In our country, there is such a type of activity as FOP(in Ukrainian) - Individual entrepreneur and it has three groups (I have 3rd). And the tax number of this person is an individual tax number (it has 10 digits). And according to our legislation, I pay a quarterly tax for it and + income tax. In your system, you cannot specify the IPN number (which is an indicator of my activity). What should be indicated in this case?

[#25]

Hi Serhii,

A 10-digit personal Tax ID is not a VAT number and does not make you exempt from this tax. A 12-digit VAT ID or 8-digit business registration number is required in order to be exempted from this tax collection. Thank you.

[#26]

Greetings! You probably misunderstood me. I pay taxes as a private entrepreneur under the "FOP 3 group" taxation system. And my VAT number is Tax ID. And I pay quarterly 4000 UAH + 5% of income. Link to law - https://diia.gov.ua/tax-systems/3-grupa

I also attach a file with information that I am a tax payer!

"The number of the bribe on the appearance of the payer of taxes 265221203584" maybe I need to specify this number?

Let's figure it out, otherwise it turns out that I pay taxes, and they assure me of the opposite.

Perhaps you need some more documents about these moments? Tell me and I will gladly provide!

**Edited for Community Guidelines**