What you need to know about the new EU tax law

[MichaelJ]

A new EU regulation known as DAC7 requires that digital platforms like Upwork collect and report tax information. Starting in 2023, the new law applies to freelancers and businesses based in the EU.

What is DAC7?

DAC7 requires digital platforms, such as online marketplaces, to share information about financial transactions with the governments in the EU countries where their customers or service providers have a tax residence. It ensures that digital services are tracked and reported to the proper tax authorities.

When will I get a DAC7 report?

For tax year 2023, your DAC7 report will be available starting January 31, 2024, in tax forms; we’ll email you when it’s ready.

Who is eligible to receive a DAC7 report?

If in 2023 you signed up with Upwork, had financial activity, and are located in an EU country, you’re eligible to receive a DAC7.

What information does DAC7 include?

DAC7 contains financial information about your activities on Upwork, including your 2023 net income, commissions, taxes, and transactions, which are sent to applicable governments in EU countries.

Need some help? Check out our FAQs or reach out to customer support.

[yorgie]

Wanted some clarifications on some points if possible.

1)

As noted on article this quoted phrase is not clear

"(Those who signed up prior to 2023 are not impacted by the tax directive yet.)"

What does this mean?

2)

Reportable periods are not clear, so if for example:

2a) if freelancer signed up prior to 2023, i.e 2021, or 2022, are only earnings after 1-Jan 2023 being reported (1-Jan-2023 till 31-Dec-2023) OR earnings even before 1-Jan-2023 are being reported?

2b) if freelancer signed up prior after 1-Jan-2023, e.g. 10-Mar-2023, are all earnings for whole 2023 being reported which means from 10-Mar-2023 till 31-Dec-2023?

Appreciate some clarifications.

[MichaelJ]

Hi Yorg,

Thank you for sharing your questions.

For your first question about eligibility, if you are a freelancer or business with financial activity in 2023, who signed up with Upwork in 2023, and you are located in an EU country, you are eligible to receive the Form DAC7 for 2023 (please note, UK has not adopted DAC7 for 2023). For the tax year 2024, any freelancer or business with earnings on Upwork will be eligible to receive a Form DAC7 from us regardless of when you signed up (including UK-based users).

For your second question about reportable periods, the reportable year is the calendar year from January 1 through December 31. For a freelancer who signed up in 2023, their 2023 tax year DAC7 would represent all their earnings on Upwork in 2023. So, it would be their earnings from the time they signed up until the end of the year. If a freelancer signed up prior to 2023, they would not receive DAC7 until 2025 and it would only include earnings from the 2024 tax year.

I hope this helps!

[a_malioukis]

Hello, I personally contacted support regarding this issue as the way it was phrased is indeed confusing( In my case, I signed up with Upwork prior to 2023 )

Part of the conversation:

Me (having an initial convo about the matter with the customer support agent) : ''............ Just to confirm one more time: the regulation will apply to me starting in 2024, which effectively means 2025. Before 2024, I won't receive any tax information or have details shared with the tax authorities under DAC7. Is that accurate?"

Support: Yes for the year 2023 you are exempted. You will receive your DAC7 for the year 2024 in the year 2025 hopefully. ''

Maybe a community manager can verify this customer support statement as well. 

[MichaelJ]

Hi Alex,

If you signed up prior to 2023, you would not receive DAC7 for 2023. If you have financial activity in 2024 and you are located in an EU country, you are eligible to receive Form DAC7 for 2024 (which you would receive in 2025).

[colettelewis]

It would be helpful if Upwork could reply to the OP's questions particularly the first. 

[guntisenzo]

Hello guys,
Can somebody explain to me?

Upwork will report tax to my country by it self or I will get report from upwork and it's going to be my duty to report to govermant?

[LuiggiR]

Hi Guntis,

The Form DAC7 is used to report payments made to persons who are tax residents of any member country within the EU. This form may also help you document your yearly income as you prepare your taxes or complete other business. 

You'll receive an email notifying you when the form is ready for download, and once ready, you can obtain it by going to Settings > Tax Information > Tax forms. You'll use it to report your income to your local tax authorities.  You can learn more in this page. 

[crart]

I read "(Those who signed up prior to 2023 are not impacted by the tax directive yet.)" - I registered at UW in 2017. How does this new rule impact me?

Second question - UW reports payments made to EU based freelancer, yet you say also "You'll use it to report your income to your local tax authorities.". So who is actually reporting?

Please note that vague replies to such important matter will only create more mess than already exists. I welcome clear and true answers.

[759e32fa]

Hi Olga,

DAC7 is a new tax directive that only applies to freelancers and agencies who both signed up on Upwork in 2023 and earned any money. For you, this means that the directive does not apply until the tax year 2024. For the tax year 2024, we will create a Form DAC7 for all freelancers and agencies who are EU-based and receive payments in 2024, regardless of when you signed up on Upwork.

We will report the tax information you provide on the DAC7 and your earnings to the relevant EU tax authorities. You also have the responsibility of reporting this income on your tax return even if you do not get any forms from us. You can find all of this information and more in this help article and this Community post.

That said, please keep in mind we cannot provide individual tax guidance. Please consult your country’s tax authority or your tax advisor with questions related to your specific situation.

[crart]

Thank you. This means UW will send report in 2025, for the year 2024, if I read it right, kindly confirm.

I will go ahead and print your reply in case anything goes south re. taxes in my country.

[AndreaG]

That's right, Olga. Reporting for 2024 will be in January 2025.

[crart]

Thank you. However, I know reporting for tax year is in the following year January, so I was asking specifically about the new rules starting to affect me. Let me rephrase: given I registered at UW before 2023, will I be provided with report for 2024, NOT 2023, as per this quote: ""(Those who signed up prior to 2023 are not impacted by the tax directive yet.)"? I do appreciate admins' forum participation but please be more careful regarding questions users may have. Especially if the subject is that important.

[AveryO]

Hi Olga, Luciana, and Guntis, 

Please see Mike's reply, which I will also paste here for your reference: 

"..The reportable year is the calendar year from January 1 through December 31. For a freelancer who signed up in 2023, their 2023 tax year DAC7 would represent all their earnings on Upwork in 2023. So, it would be their earnings from the time they signed up until the end of the year. If a freelancer signed up prior to 2023, they would not receive DAC7 until 2025 and it would only include earnings from the 2024 tax year."

[crart]

Thanks but I already got reply from support which I contacted directly after not receiving meaningful reply in this thread. Glad you put it here nevertheless, some might read it here and actually find an answer.

[luticar]

Hi, Annie, what if the freelancer signed up on Upwork before 2023, but they earned some money in 2023?
I'm sorry if this question looks repetitive, but I need to make sure that I am not being lost in translation.

[crart]

Good luck with getting an answer. I asked specific question, got reply that didn't answer the question I had but gave some obvious info, and so I repeated my question. Still waiting for valid reply.

[guntisenzo]

Exatcly.

MY MAIN QUESTIONS IS!!!!!! WHO IS REPORTING ???????

All Annie did is copy paste info from FAQ 

[guntisenzo]

CAN SOMEBODY PLEASE JUST REPLAY TO THIS QUESTION?

WHO IS REPORTING?

Moderators keep copy paste same info 

[yorgie]

Its the marketplace's i.e Upworks responsbility to report it to the EU system, which means each EU country will have your transactions eventually. Thus in due time they will run some process to cross-check if it matches with what you also reported on your tax return. That is what to expect. So its wise to report the same to be in sync with reports UPW has, so by doing so, should be no issues eventually.

Extract from what is DAC7, below -   "platform operators" means Upwork.

"... as of 1 January 2023, platform operators will be required to provide information on sellers making use of these platforms, such as their income, to the tax authority."

[crart]

---

Yorg X wrote:

Its the marketplace's i.e Upworks responsbility to report it to the EU system, which means each EU country will have your transactions eventually. Thus in due time they will run some process to cross-check if it matches with what you also reported on your tax return. That is what to expect. So its wise to report the same to be in sync with reports UPW has, so by doing so, should be no issues eventually.

---

This may be tricky. Currencies conversion rates must be the same between both parties. I cannot report in $$ and that's the only report UW will give. Sadly, I don't expect any clarification, just like I'm waiting for confirmation of my previous post.

[b3feb7d7]

Can I please get my DAC7 report before January 31st? My accounting deadline is on the 31st, and it's really important to have this document before I submit everything

[LuiggiR]

Hi Anna,

I see that you were able to contact the support team regarding your concern. They'll continue assisting you via your ticket with them.

[necip]

Hi Team,
Is there anyone here who got Portugal D7 visa before or knows who got? 
I am planning to apply and I will need some information.
I will be in Portugal between 4th and 9th February 2024. I would like to meet grab a beer with you . 
thanks!

[deborah-ponzio]

Does the DAC7 Form also include the commissions that we paid to Upwork? I would be grateful for your advice, thank you!

[AveryO]

Hi Deborah, 

Here's what we have in the help article which you can visit on this page: 

A Form DAC7 will contain all of your Upwork transactions, which we report by quarter, including:

• Total of net earnings (USD): Net earnings are calculated by deducting any refunds, taxes, fees and commissions paid during the period from your total gross earnings
• Total fees and commissions (USD): Fees and commissions include all the payments you make to Upwork, such as Connects purchases, payment transfers, and freelancer service fees, for example
• Total taxes (USD): Taxes include your country's income taxes, withholding taxes, and any other taxes that Upwork must collect in order to comply with local tax laws
• Total number of transactions: Number of transactions includes all earnings, and indicates the total amount of transactions in each quarter

[yasmin_said]

Is there a way to see an example copy of how it will look like, that is an example copy of upwork's DAC7 ? It would be easier to get a better understanding for those of us that process visual images better.

[AveryO]

Hi Yasmin, 

We don't have an available sample right now, but if you are eligible to receive it, you will be able to access and download the form by going to Settings > Tax Information > Tax forms. We'll also email you when your DAC7 is ready with a link to the Tax Information page. 

[deborah-ponzio]

Thank you Avery!

[b93402d9]

Hello, 

So in 2023 until December i was registered as an Individual, in December i switched my tax information to my company. 

The problem is that Upwork issued my DAC-7 form and all the earnings are reported on my company's name.

I should've received 2 DAC-7 forms, one for individual until December and one for my company in December.

I have contacted support and they told me they can't do this because they can only issue one per account, which is totally INCORRECT.

It is Upwork's duty to issue the DAC 7 form correctly. What can i do in order for this to be solved? 

[AveryO]

Hi Eduard-Costin, 

I checked and can see that the Upwork Support Team has continuously assisted you through your open support ticket. They will share more information with you once they hear back from the relevant team. As noted on the ticket, getting the needed info may take some time. Just the same; thank you for being patient with us as our teams look into this further. 

[eb7f9acb]

I have a question. I have been registered for January with my EU residency but left the country and moved to South America recently. Will UpWork report all of my 2024 earnings to the EU? Or just the January?

[eb7f9acb]

I have a question. I have been registered for January with my EU residency but left the country and moved to South America recently. Will UpWork report all of my 2024 earnings to the EU? Or just the January?

[JoanneP]

Hi Matthias,

DAC7 impacts residents of EU member states who earn revenue on Upwork. If your primary residence is not in an EU member state, DAC7 does not apply to you. If you move your primary residence into, or out of, an EU member state, you must update your tax information.

If you are a freelancer or business with financial activity in 2023, who signed up with Upwork in 2023, and you are located in an EU country, you are eligible to receive the Form DAC7 for 2023.

For tax year 2024, any freelancer or business with earnings on Upwork will be eligible to receive a Form DAC7 from us regardless of when you signed up. That means that you will receive a DAC7 from us in 2025 if you have earnings in 2024.

[00958323]

Will there be a PDF or otherwise downloadable version of the form? Trying to print the form as shown on the website gives a rather unusable result with cropped parts and duplicated content.

I would like to save a PDF copy of the DAC7 form for future needs.

[LuiggiR]

Hi Rodolfo,

We’ve escalated your community post to a support ticket. One of our agents will be in touch with you soon to assist.

[116e5a34]

I've been attempting to contact someone directly, but it seems the Chat function doesn't provide an option to connect with a live agent. Could you please provide me with a link or email address where I can ask the questions I need answered?

[116e5a34]

Also, it does not let me submit a support ticket either. 

[ArjayM]

Hi Nicolas,

I'm sorry to learn you're having difficulties getting in contact with our support team for assistance. I can sense the urgency of your concern. Could you please share more details about your concern with us? We'll gladly look into that and assist you accordingly.

Looking forward to your response.

[116e5a34]

I'm interested in understanding current processes more thoroughly, as I've found that the explanations available online often lack clarity.

1. If I received payment this year but wish to refund it to the client due to concerns about the legitimacy of the source, is it possible? Additionally, if I successfully do a refund and my income for the year becomes zero as a result, will this still be sent to the tax authorities?

2. I am currently in the process of relocating within Europe. I have previously provided a tax number, but now that I have a new one, will the DAC7 form be directed to my old country of residence or my new one?

3. Regarding UpWork payments, does the platform automatically forward DAC7 forms to the tax authorities, or am I responsible for doing so myself?