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

[MichaelJ]

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.

[zagach]

Hello!

A new message appeared in my account:

"In compliance with the new VAT law in Ukraine, we must add VAT on Upwork fees unless you are VAT registered in Ukraine. Please click here to add your Ukraine VAT information."

The field to enter the code require 12 digits, but VAT code in Ukraine is only 10 digits, so Upwork doesn't accept it. How to manage this ?

[martina_plaschka]

Have you tried with the country code? VAT numbers have a 2-digit country code. 

[zagach]

Yes, I tried "UA" but it doesn't accept letters, digits only.

[denis_moshentsev]

Same here!

CS agent in chat replied that this is a known issue and they are working on it right now. But to me, it looks like a major issue that needs to be resolved right away as it affects an entire country. Upwork, please remove this warning until the issue is fixed. I know a dozen of freelancers panicking because of it 🙂 

[zagach]

I agree with you.

[g_vasilevski]

Hi Yuri and Denis.

I'm sorry for the inconvenience this has caused you. I would like to confirm that our team is working on resolving this as soon as possible. Thank you for your patience. 

[2a05aa63]

So, is it a bug or we do need to add our VAT when it's fixed?

[mkrv]

Few hours ago received notification:

In compliance with the new VAT law in Ukraine, we must add VAT on Upwork fees unless you are VAT registered in Ukraine. Please click here to add your Ukraine VAT information. For more details, read our FAQs.

https://support.upwork.com/hc/en-us/articles/4410783619347
Oh! It looks like that page has moved.

I added my business address.
My personal РНОКПП has 10 digits instead of 8/12, and I unable to input it in form.

I pay increased rate, 5% of tax, to not pay VAT,
instead of 3%+VAT.

Please clarify, how we can handle it.

[mkrv]

the same issue described Yuri Z. here:
https://community.upwork.com/t5/Freelancers/VAT-Ukraine/m-p/990848#M623932

[weareeditmakers]

Hello Upwork,
I live in Ukraine and my account is from Ukraine, but I am a Turkish citizen, I have a VAT number from Turkey, what should I do in this case?

I am waiting for your response, have a nice day.

[g_vasilevski]

Hi Murat,

Upwork charges VAT to freelancers and agencies in certain countries unless specific exemption requirements are met. Upwork is required to collect this tax and pay it to the appropriate government agency. To learn more about this, check out this Help Article. Thank you.

[weareeditmakers]

I couldn't find any information about my condition.
I live in Ukraine and my account is from Ukraine, but I am a Turkish citizen, I have a VAT number from Turkey, what should I do for VAT registration?

[feed_my_eyes]

You pay taxes in the country where you live. If you live in the Ukraine, can't you get a VAT number for there?

[weareeditmakers]

No, because I am not a citizen of Ukraine.

[2a05aa63]

Even most ukrainians can't get the required VAT number and will pay this tax instead of Upwork

[radmilashanovska]

Hello Upwork,

I have 10 numbers for a VAT identification number, but Upwork wants 12 numbers, can you help with this? 

I am waiting for your response, have a nice day.

[2a05aa63]

I tried to use the "Номер запису про взяття на облік" which is 12 digits. But yeah, quite confusing what is happening.

[zagach]

Where did you get this number ?

[2a05aa63]

my.diia.gov.ua/my/taxes

[7d7cc1dd]

hey, did it work? 

[ifortuna]

**Edited for Community Guidelines** I don't have a VAT number.

[zagach]

So what is the fee for accounts without VAT number ?

[ifortuna]

It looks like phrase "I have an individual VAT ID Number (Індивідуальний податковий номер)" has a wrong Ukrainian translation. Our tax number has 10 digits (not 12). The VAT ID Number is other creature :). So it looks like we will need to pay an additional fee, but how much?

[zagach]

They announced that from January 2022 anyone without 12-digit number (думаю лише ФОП такий має) will pay additional 20% from certain transactions. ☹️

[2a05aa63]

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

[ezzeldeenom]

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!

[zagach]

-

[sstefaniuk]

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!

[amgad2020]

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 !

[ais_7]

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

[amgad2020]

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 !

[kochubei_valeria]

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.

[vadym_burla]

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.

[kochubei_valeria]

Hi Vadym,

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

[daria_pakhomova]

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?

[2a05aa63]

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

[leadsquad]

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?

[2a05aa63]

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

[2a05aa63]

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)