Help Center article link to follow - Kenya VAT for Clients & Kenya VAT for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
VAT is a tax on goods or services, including our services to you, and remit means to send money for a payment. Kenya requires Upwork to collect value-added tax, or VAT, and remit the tax to the government of Kenya.
Services that VAT applies to in Kenya:
- Marketplace fee,
- remote client fee,
- conversion fee, and;
- recruiter fee
VAT ID
Clients are not required to provide a VAT ID to Upwork, and providing a valid VAT ID does not exempt clients from paying the tax. However, if they choose to provide their VAT ID, Upwork will display it on your invoices. They can enter it in your account’s Settings > Tax Information.
Client’s Kenya VAT ID number is different from their tax identification number. It is a unique ID that they may request from their government by registering for VAT in Kenya. It has 11 alphanumeric characters and should look like this, for example: P999999999A.
To learn more, suggest that they visit the Kenya tax authority website.
Kenya does offer tax exemption:
If a customer that resides in Kenya reaches out to state they are exempt, please see an SA/TL to reach out to #ask-taxes for next steps.
Services that VAT applies to in Kenya:
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
VAT ID
Freelancers are not required to provide a VAT ID to Upwork, and providing a valid VAT ID does not exempt FLs from paying the tax. However, if they choose to provide their VAT ID, Upwork will display it on your invoices. They can enter it in your account’s Settings > Tax Information.
Freelancer’s Kenya VAT ID number is different from their tax identification number. It is a unique ID that they may request from their government by registering for VAT in Kenya. It has 11 alphanumeric characters and should look like this, for example: P999999999A.
To learn more, suggest that they visit the Kenya tax authority website.
Kenya does offer tax exemption if the freelancer has a valid tax exemption certificate.
Colombia VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Georgia VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Vietnam VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
United Arab Emirates VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Albania VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Norway VAT
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
SST for Malaysia
Help Center article link to follow - Malaysia SST for Clients & Malaysia SST for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “SST” card in Settings > Tax Information. If they click “I have a SST ID”, the card will open up a spot to enter their number:
Malaysia requires Upwork to collect sales and services tax, or SST, and remit the tax to the government of Malaysia. SST is a tax on goods or services, including our services to you, and remit means to send money for a payment.
Services with SST in Malaysia
- Marketplace fee,
- Remote client fee,
- Conversion fee, and;
- Recruiter fee
SST ID
Clients are not required to provide a sales and services tax ID to Upwork, and providing a valid SST ID does not exempt CL from paying the tax. However, if they choose to provide their SST ID, we will display it on their invoices. CL can enter it in their account’s Settings > Tax Information.
An SST ID number is different from a CL tax identification number or their National Registration Identity Card number (NRIC number). It is a unique ID that CL may request from their government by registering for SST. It has 15 alphanumeric characters and should look like this, for example: W88888888888888.
CL may also use their Service Tax on Digital Services ID (SToDS ID), which has 8 digits and looks like this, for example: 88888888.
To learn more, suggest CL to visit the Malaysia tax authority website.
Exemption
Malaysia does not offer any applicable exemptions to SST, and there is no exemption for providing their SST ID.
Malaysia requires Upwork to collect sales and services tax, or SST, and remit the tax to the government of Malaysia. SST is a tax on goods or services, including our services to freelancers, and remit means to send money for a payment.
Services with SST in Malaysia
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
SST ID
Freelancers are not required to provide a sales and services tax ID to Upwork, and providing a valid SST ID does not exempt FL from paying the tax. However, if they choose to provide their SST ID, we will display it on their invoices. They can enter it in their account’s Settings > Tax Information.
An SST ID number is different from their tax identification number or their National Registration Identity Card number (NRIC number). It is a unique ID that FL may request from their government by registering for SST. It has 15 alphanumeric characters and should look like this, for example: W88888888888888.
FL may also use their Service Tax on Digital Services ID (SToDS ID), which has 8 digits and looks like this, for example: 88888888.
To learn more, suggest FL to visit the Malaysia tax authority website.
Exemption
Malaysia does not offer any applicable exemptions to SST, and there is no exemption for providing SST ID.
VAT Nigeria
Help Center article link to follow - Nigeria VAT for Clients & Nigeria VAT for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Nigeria requires Upwork to collect sales and services tax, or VAT, and remit the tax to the government of Nigeria. VAT is a tax on goods or services, including our services to freelancers, and remit means to send money for a payment.
Services with VAT in Nigeria
- Marketplace fee,
- Remote client fee,
- Conversion fee, and;
- Recruiter fee
CLs are not required to provide a VAT ID, and providing a valid VAT ID does not exempt them from paying the tax. However, if they choose to provide their VAT ID, we will display it on their invoices.
In Nigeria, their VAT ID is their personal or company Tax Identification Number that is issued by the Federal Inland Revenue Service (FIRS). It has 12 digits and should look like this, for example: 01012345-0001
To learn more, suggest customer to visit the Nigeria tax authority website.
Services that VAT applies to in Nigeria
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
VAT ID
FLs are not required to provide a VAT ID, and providing a valid VAT ID does not exempt FL from paying the tax. However, if you choose to provide their VAT ID, we will display it on their invoices.
In Nigeria, their VAT ID is their personal or company Tax Identification Number that is issued by the Federal Inland Revenue Service (FIRS). It has 12 digits and should look like this, for example: 01012345-0001
To learn more, suggest customer to visit the Nigeria tax authority website.
Exemption
Nigeria does not offer any applicable exemptions.
Help Center article link to follow - Serbia VAT for Clients & Serbia VAT for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Serbia requires Upwork to collect sales and services tax, or VAT, and remit the tax to the government of Serbia. VAT is a tax on goods or services, including our services to freelancers, and remit means to send money for a payment.
Services with VAT in Serbia
- Marketplace fee,
- Remote client fee,
- Conversion fee, and;
- Recruiter fee
CLs are not required to provide a VAT ID, and providing a valid VAT ID does not exempt them from paying the tax. However, if they choose to provide their VAT ID, we will display it on their invoices.
A VAT ID number is not the same as their tax identification number for other taxes. In Serbia, it is a unique identifying number that they may request from your government by registering for VAT in Serbia. It has 9 numbers and should look like this, for example: 999999999.
To learn more, suggest customer to visit the Serbia tax authority website.
Exemption
Serbia does not offer any applicable exemptions to VAT, and there is no exemption for providing your VAT ID.
Services that VAT applies to in Serbia
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
Exemption
Serbia does not offer any applicable exemptions to VAT, and there is no exemption for providing your VAT ID.
Help Center article link to follow - South Africa VAT for Clients & South Africa VAT for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Services with VAT in South Africa
- Marketplace fee,
- Remote client fee,
- Conversion fee, and;
- Recruiter fee
VAT ID
CLs are not required to provide a VAT ID, and providing a valid VAT ID does not exempt them from paying the tax. However, if you choose to provide their VAT ID, we will display it on their invoices.
CL VAT ID is a unique identifying number that you may request from their government by registering for VAT in South Africa. It is a 10-digit number that starts with a 4 and looks like this, for example: 4999999999.
To learn more, suggest to customer that they visit the South Africa tax authority website.
Exemption
South Africa does not offer any applicable exemptions to VAT, and there is no exemption for providing VAT ID.
Services that VAT applies to in South Africa
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Help Center articles:
Customers will see this “GST” card in Settings > Tax Information. If they click “I have a GST ID”, the card will open up a spot to enter their number:
Help Center articles:
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Help Center article link to follow - Switzerland VAT for Clients & Switzerland VAT for Freelancers
Any interactions about this tax, please code with these ZD categories: Taxes > Indirect Tax Expansion
Customers will see this “VAT” card in Settings > Tax Information. If they click “I have a VAT ID”, the card will open up a spot to enter their number:
Services with VAT in Switzerland
- Marketplace fee,
- Remote client fee,
- Conversion fee, and;
- Recruiter fee
VAT ID
CLs are not required to provide a VAT ID, and providing a valid VAT ID does not exempt you from paying the tax. However, if they choose to provide their VAT ID, we will display it on their invoices.
In Switzerland, their VAT ID starts with CHE, followed by 9 numbers, followed by one of three alphabet combinations, either MWST (German), TVA (French), or IVA (Italian). It should look like this, for example: CHE-999999999MWST.
To learn more, suggest customer to visit the Switzerland tax authority website.
Services that VAT applies to in Switzerland
- Membership fees,
- Connects purchases, and;
- Freelancer service fees
VAT ID
In Switzerland, their VAT ID starts with CHE, followed by 9 numbers, followed by one of three alphabet combinations, either MWST (German), TVA (French), or IVA (Italian). It should look like this, for example: CHE-999999999MWST.
Exemption
Switzerland does not offer any applicable exemptions to your VAT, and there is no exemption for providing your VAT ID.
See “FAQs” drop-down to assist when communicating with users.
EU Value Added Tax (VAT) (user-friendly page)
VAT is levied on most goods and services provided by registered businesses and some goods and services imported from outside the European Union.
- Applies to agencies and freelancers
- Relevant for users in 28 European countries with some exemptions (see country list)
- Applies to fees from user to Upwork (service fees, memberships, and Connects)
Any EU freelancer who provides services to a client in the same EU member state should consult their tax advisor to determine if the freelancer must separately send a VAT invoice to that client. Upwork will not initially support this capability.
Users who provide VAT number: will not be charged VAT on Upwork services, but -
- Upwork will print “VAT Reverse Charged” on invoices and user may be required to self-assess VAT on their VAT return under the reverse-charge mechanism applicable to ESS
- Separately, if CL also has a VAT number and is located in a different country than FL, Upwork will print “VAT Reverse Charged” to the invoice from FL to CL
User who DO NOT provide VAT number (for freelancers and agencies in one of the listed EU countries):
VAT will be charged on the following Upwork fees:
- Upwork service fees
- Membership fee
- Additional Connects purchases
These will appear on the invoice sent by Upwork to the FL (based on the VAT rate applicable to the country listed on the FL’s profile). Beyond this change, users can continue their work as usual. This tax will not apply to the payments the freelancer/agency receives from clients, only on applicable fees Upwork collects.
Non-EU freelancers & agencies - If CL is in the EU and has provided a VAT number, Upwork will add “VAT Reverse Charged” to the invoice from FL to CL.
How is VAT charged?
-
Service Fee
- When freelancers receive payments from clients, VAT is charged on top of the service fee charged against the client payment.
Example: If freelancer receives $100, the service fee that Upwork charge is $10 (which is 10% of the payment received). If the freelancer's VAT rate is 20%, the total fee that we will charge the freelancer will be $12. ($10 service fee + $2 which is 20% of the $10 service fee).
- When freelancers receive payments from clients, VAT is charged on top of the service fee charged against the client payment.
-
Memberships/Connects
- When freelancers pay/purchase a membership or additional Connects, VAT will also apply.
Example: Freelancer purchase $50.00 worth of Connects and is located in a country with VAT rate of 22%. The total charge we will charge the freelancer for this purchase will be $61.00 ($50 +$11 which is 22% of $50)
- When freelancers pay/purchase a membership or additional Connects, VAT will also apply.
Things to Note:
- VAT rate is set by the user's government
- VAT rates can change with time
- Different countries have different VAT rates
- All VAT calculations will be displayed in the transaction description
- User can remove, but not edit their VAT number. If their VAT changes or entered incorrectly, they will need to completely remove it and add a new one.
- VAT numbers are stored at the AE level, so agencies with more than one AE can have more than one VAT number
- VAT assessments will be reversed with refunds, transaction reversals, and dispute losses
Upwork freelancers and agencies (based on agency address) where VAT tax will be applied without a VAT number added:
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czech Republic
- Denmark, Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Ireland
- Italy
- Latvia
- Lithuania
- Luxembourg
- Malta
- Netherlands
- Poland
- Portugal
- Romania
- Slovakia
- Slovenia
- Spain
- Sweden
Although VAT applies to the above 28 EU member countries, within certain countries, VAT is exempt. This means users are not required to pay VAT or provide a valid VAT ID.
Here are those exempt locations (see “VAT Exemptions and Reversals” tab):
- Denmark: Faroe Islands, Greenland
- Finland: the Åland Islands
- France: Guadeloupe, Frans Guyana, Martinique, Réunion, Saint Barthélemy, Saint Martin, New Caledonia, Wallis and Futuna, French Polynesia, French Southern and Antarctic Lands, Mayotte, Saint-Pierre and Miquelon
- Germany: Büsingen, Heligoland
- Greece: Mount Athos
- Italy: Livigno, Campione d’Italia and the Italian waters of Lake Lugano;
- Netherlands: Aruba, Bonaire, Curacao, St. Martin, Saba and St. Eustatius;
- Spain: Ceuta, Melilla and Canary Islands
- United Kingdom: Anguilla, Cayman Islands, Bermuda, British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn Islands, Saint Helena, South Georgia and the South Sandwich Islands, Turks and Caicos Islands and the Channel Islands (Alderney, Jersey, Guernsey, Herm, Sark).
- Other: Vatican City, San Marino and Andorra are not a part of the EU VAT territory.
In certain countries within the 28 EU member countries VAT applies to, VAT is actually exempt; these users are not required to pay VAT or provide a valid VAT ID. See “Country List” tab for exempt list.
If users from these locations contact Upwork, follow the steps below on how to process a VAT exemption/reversal.
VAT Exemption / Reversal Request Process
For CS EU VAT Escalations and Questions Dash Room ONLY
For Exemptions
- “Own Accounting Entities” box > under “Actions” field, click wrench icon > “Other Operations”
- Scroll down > click “Tax Information” from left menu
- Click the “Exempt from VAT assessments” box
- In the “Reason” field, select “Location Exemption”
- CSS notes will auto-populate; enter link to ZD ticket in "Document ID" field and click “Submit'
- If a VAT reversal is also needed, see “For Reversals” below, otherwise let agent know they’re all set!
For Reversals
Reverse VAT for a single transaction:
- “Own Accounting Entities” box > click wrench > “Other”
- Filter date to locate the VAT charge for service fee, membership, or connect
- Click “Display” > click “Ref ID” > click “Undo VAT” on left menu
Reverse VAT for multiple:
- “Own Accounting Entities” box > under the FL “AE”, click wrench icon > “Other Operations”
- Scroll down > click “Adjust VAT" from left side menu > select the specific date
- Select a “New Rate” reason > click “Preview”
- If the transaction is correct, enter CSS notes and click the “Adjust VAT” button
- Let the agent know they’re all set!
TIP: Use Ctrl + F if a PC, or Command + F if a Mac to help search for your question!
What is VAT, and how does this affect me?
Value-added tax, or VAT, is a tax that some countries and jurisdictions assess on the supply of goods and services. If you do not have a VAT number, you can continue business as usual, but Upwork will add your country-specific VAT to our service fee, and remit this tax to your tax authorities. We will also charge VAT to purchases of services and memberships on our platform. This means you’ll see an extra VAT charge on the transaction screen when purchasing premium Upwork memberships and additional Connects.
If you have a VAT number, Upwork will not charge this tax but we will print “VAT Reverse Charged” on your invoice and you may be required to self-assess VAT on your VAT return under the reverse-charge mechanism applicable to ESS. Additionally, if you are working with a client that also has a VAT number and does not operate in your same country, Upwork will add “VAT Reverse Charged” to the invoice from you to your client so that your client can assess whether to self-assess VAT on their return.
How is VAT calculated, and what will I be charged?
Your EU member state assesses VAT for each supply of goods and services with added value. The tax rate varies by country, which means your tax percentage will depend on your country’s VAT rate. You can find the current VAT rate for your country here.
How do I provide my VAT number?
New freelancers and agencies will be prompted to provide a VAT number when signing up for an account. If you are an existing freelancer or agency, you will be able to provide your VAT number through email and in-product notifications. Alternatively, you can enter your VAT number on the Tax Information page within your User Settings. You can add a VAT number at any time from this page, even if you declined to do so initially.
Why are you only starting to charge VAT now?
As Upwork continues to grow, our international presence has expanded. To better serve the needs of our international customers, we are increasing services suited specifically for you.
The first of these changes is to either print “VAT Reverse Charged” or to charge VAT on our invoices to EU freelancers and to remit those charges to EU governments as required. The second change will print “VAT Reverse Charged” on certain invoices from EU freelancers to EU clients to enable your clients to self assess VAT on your invoice to them, when applicable.
Where can I find my VAT invoice?
You can find your VAT invoice in Reports by clicking through to Transaction History, which is under “More Reports.”
VAT is a Value added tax, for services and goods. VAT is always paid by the client, so why are you charging the contractor for that?
The VAT charged by Upwork is only for the VAT on the service fees that Upwork charges you for using Upwork's services. Upwork does not charge and does not take responsibility for VAT that may or may not be due on charges by you as a Freelancer to your client.
What happens to my VAT if I move to a different country?
If you indicate update your profile country to one without VAT or a different VAT rate, we will automatically adjust your VAT to correspond with the rates of the new country you reside in. You can find the current VAT rate for your country here .
How long does it take for Upwork to validate VAT numbers?
It can take up to 3 business days for Upwork to validate your VAT number.
If my VAT number is pending verification and I make a transaction, will I be exempt from the VAT charge?
We will charge VAT on transactions made while VAT numbers are pending validation and cannot refund you this amount. You may be able to claim credit for such amounts on your VAT return; please check with your government’s tax authorities.
You emailed to say that my VAT number was declined. Why?
If we were unable to validate the VAT number you submitted, it was likely due to one of the following reasons:
- Country mismatch
- Name mismatch
- Expired VAT ID
- Invalid format (for information on formatting, click here and see Q11)
Until your VAT number is validated, a VAT charge will appear on the invoice sent by Upwork to you (based on the VAT amount applicable to the country listed on your profile)
Will VAT be remitted to my local government in my name or in Upwork's name?
We will report and remit the VAT amounts we collect to the appropriate tax authorities through the EU Mini One Stop Shop (MOSS).
I am classified as an "auto entreprenuer" and are not subject to the VAT. Or I have an exempt status. or have some kind of 'organization' classification instead of individual.
Upwork is charging VAT on Upwork's electronically supplied services. The only way for us to confirm whether someone is a taxable person for VAT purposes is for us to collect a valid VAT number in the prescribed EU format from that person.
Do you have plans to add VAT on the entire fee charged versus the service fee?
We will not be charging VAT on the amount paid from the client to freelancer. VAT is only applied to the service fee collected by Upwork. If an EU freelancer supplies services to a client in the same EU member state, the freelancer may be required to send a VAT invoice to the client for the freelancer’s fees. Please obtain the advice of tax advisors on this question.
I don’t have a VAT number and if you charge it, you will be sharing this information with my government against my wishes. This isn’t fair.
This situation should not occur because Upwork reports the aggregate VAT amount we collect and remit through the EU MOSS mechanism and we do not report personal information in those reports.
Internal note: If a government were to audit us, we will provide information as required by law in accordance with our privacy policy.
I’m a client and my contractor just called me to say that you’re raising prices for freelancers/agencies in the EU. This isn’t fair.
We are not raising prices for freelancers or agencies in the EU. To better serve the needs of our international customers, we will begin charging VAT on ESS that we supply to you, and remitting those charges to EU governments. Upwork will not keep the VAT charge; this is simply a charge that your government requires us to collect and remit to them. Additionally, if you and your client both have VAT numbers but your client is operating in a different EU member state than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client so the client can self-assess VAT.
What about the VAT charge between the freelancer and the client outside Upwork?
If you and your client both have VAT numbers but they are operating in a different country than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client so the client can self-assess VAT. In the case where your client is in you same EU country or has no VAT number we will not be able to apply a reverse charge to your client’s invoice and you will be responsible for self-assessing VAT and issuing them an invoice.
Will I need to give Upwork any other official identifying information?
No. We will only be collecting VAT numbers for the purpose of identifying those who will not be subject to VAT.
Is this just a way for Upwork to earn more money?
Upwork will not keep the VAT that we collect; your government requires us to collect it and remit it to your tax authorities. Additionally, if you and your client both have VAT numbers but your client is operating in a different EU member state than you, Upwork will print “VAT Reverse Charged” on the invoice from you to your client so that your client can self-assess VAT.
How can I be sure VAT is calculated correctly?
You can see the VAT calculation breakdown in your transaction descriptions, as well as in your invoices.
Will Upwork be automatically monitoring and adjusting rates for all country-specific VAT?
Yes, Upwork will keep its rates up-to-date.
Is inputting a VAT number optional in all countries?
Yes, adding a VAT number is optional for all agencies and freelancers. But if an EU freelancer does not add a VAT number, we are required to charge VAT on our ESS to that freelancer.
In Greece, there is law that freelancers need not pay VAT for income coming from the US. Why should I be charged VAT?
We are charging VAT on Upwork’s service fee for Electronically Supplied Services collected by Upwork. This is different than “income coming from the US.”
Do you have a way to verify the VAT percentages of every country?
Yes. We receive periodic updates from official sources.
How often do we submit this VAT information to the government?
Aggregate VAT amounts are reported and submitted quarterly through the EU MOSS mechanism.
What is your security like on encrypting our VAT numbers? In some countries, it’s considered as private as a Social Security number.
VAT numbers will be handled in accordance with advice from legal counsel.
Are withdrawal fees excluded?
Yes. We will not charge VAT on withdrawal fees and wire fees.
Are you adding VAT for clients?
Thanks for your question, VAT is currently not collected from clients who use Upwork to find freelancers.
I live in EEA & EFTA countries. Will this be added for me?
We currently do not have plans in place to add VAT for these countries at this time.
Why is upwork doing this? Isn't it a violation of our terms, I'm solely responsible for tax, see 6.7 of the ToS?
Upwork is collecting VAT on Upwork's services. Yes, a freelancer is responsible for any tax determination relating to the services rendered by Freelancer to its Client.
A VAT agent must provide some type of signed documentation to the Freelancer?
The invoice from Upwork to you for Upwork's service fee, membership or Connects, will contain Upwork's VAT number. We are collecting VAT on Upwork's services, but are not acting as your VAT agent. You are responsible for the VAT related to the services provided by you to the client.
Freelancers from Poland would like to know in what form you will provide our countries with the VAT statement.
Upwork will remit the collected VAT amounts to the EU tax authorities via the MOSS system. This is an electronic system created by the EU, through which Upwork can remit the VAT due for all 28 EU member states. The VAT return submitted by Upwork through this system, will reflect which amount goes to which country. The member state of Upwork's MOSS registration will subsequently distribute the remitted VAT amounts to each of the respective EU member states. That way all member states receive what they are legally entitled to.
I have a VAT but it is not business VAT, does that count as a valid VAT?
Only the prescribed EU format counts as a valid VAT ID. Please click here to see these formats: http://ec.europa.eu/taxation_customs/vies/faq.html
Some FLs have said that they are an "auto entreprenuer" and are not subject to the VAT or an exempt status. Why/how can we still implement this with these users considering a) they don't have a VAT and b) is it legal?
Upwork is charging VAT on Upwork's electronically supplied services. The only way for us to confirm whether someone is a taxable person for VAT purposes is for us to collect a valid VAT number in the prescribed EU format from that person.
Why is upwork doing this? Isn't it a violation of our terms, I'm solely responsible for tax, see 6.7 of the ToS.
Upwork is collecting VAT on Upwork's services. Yes, a freelancer is responsible for any tax determination relating to the services rendered by Freelancer to its Client.
Shouldn’t a VAT agent provide some type of signed documentation to the Freelancer?
The invoice from Upwork to you for Upwork's service fee, membership or Connects, will contain Upwork's VAT number. We are collecting VAT on Upwork's services, but are not acting as your VAT agent. You are responsible for the VAT related to the services provided by you to the client.
We will report and remit the VAT amounts we collect to the appropriate tax authorities through the EU Mini One Stop Shop (MOSS). Upwork reports the aggregate VAT amount we collect and remit through the EU MOSS mechanism and we do not report personal information in those reports.
Me and other freelancers from Poland would like to know in what form you will provide our countries with the VAT statement."
Upwork will remit the collected VAT amounts to the EU tax authorities via the MOSS system. This is an electronic system created by the EU, through which Upwork can remit the VAT due for all 28 EU member states. The VAT return submitted by Upwork through this system, will reflect which amount goes to which country.
The member state of Upwork's MOSS registration will subsequently distribute the remitted VAT amounts to each of the respective EU member states. That way all member states receive what they are legally entitled to.
I have a VAT but it is not business VAT, does that count as a valid VAT?
Only the prescribed EU format counts as a valid VAT ID. Please click here to see these formats: http://ec.europa.eu/taxation_customs/vies/faq.html
EU countries have different VAT rates. What happens in a case when my local VAT is 23% and my client is 13%?
Upwork will only charge VAT to you on its fees for using Upwork. No VAT will be charged by Upwork to you on the fees charged by you to your client. This is something for which you as a freelancer remain responsible.
VAT is a Value added tax, for services and goods. VAT is always paid by the client, so why are you charging the contractor for that?
The VAT charged by Upwork is only for the VAT on the service fees that Upwork charges you for using Upwork's services. Upwork does not charge and does not take responsibility for VAT that may or may not be due on charges by you as a Freelancer to your client.
But I do not need to pay VAT - because of the "small business operator regulations" - so upwork should find a solution for people like me because if I pay the VAT I won't get it back.
Upwork will need to charge VAT on its service fees to you in case you cannot provide Upwork with a VAT number in the required format.
I am the only one that SHOULD pay the VAT directly, no-one else on my behalf. You cannot charge us with any way this amount. Unless, you are able to send us a monthly OFFICIAL document that you paid our country, you are just stealing our money.
Please keep in mind that Upwork will only charge VAT in its services rendered to you and not on the services rendered by you to the client. Upwork is only responsible for the VAT on its services to you.
Why are you paying the VAT on our behalf when we don't have to?
Upwork is fulfilling its own tax obligations related only to Upwork's service fees charged to you and not what the client owes you as a freelancer.
I need clarification on this. VAT rules vary from country to country, and depends on your yearly income, not for EVERY income. As a freelance journalist in Portugal most of my life, If I didn't reach 10.000 euros/ year, paying VAT was not mandatory.
Upwork is fulfilling its own tax obligations related only to Upwork's service fees charged to you and not what the client owes you as a freelancer. Your obligations for your services to clients is not affected by this.
I'm worried if UpWork decides to check the VAT number validity at VIES platform. Portugal is one of those countries that do NOT provide this kind of information, thus you will never find my VAT number there. This will mean I'll have to pay VAT because I don't have a valid VAT number.
Every country in the EU participates in the VIES system of the EU, including Portugal. Therefore, if you have a VAT ID number in the proper format, it should show up in the VIES database.
Is there a way for the freelancers to verify if the monies were submitted to the proper authorities?
Unfortunately, not. Upwork is fulfilling its own tax obligation here and not the Freelancer's obligations. The VAT charged must by remitted by Upwork to the EU tax authorities on the basis of the current EU VAT regulations.
Some freelancers state that due to the size of their company and revenues they are exempt from paying VAT and don't have a number. Will Upwork still charge them VAT in such case?
Yes
Where do I enter my VAT and what format should it be in?
You can enter your VAT number in your Upwork Tax settings . Please note that all VAT numbers provided to Upwork must be in the VIES format listed here . If the tax ID that you submit is not in the format provided by VIES, Upwork will not be able to validate it. You can check if your VAT number will be validated on the VIES website here .
Why does Upwork's VAT number not show up in the VIES system?
Upwork's VAT number is EU528002406. Companies registered via the MOSS system receive an uniquely formatted VAT ID from the European tax authority, which is not verifiable in the VIES system.
Why doesn't Upwork charge VAT to clients in the EU?
This is because Upwork does not have an office, a subsidiary, or any other presence (referred to as a “permanent establishment”) in the EU. As a result, we are not obligated to register in the EU for VAT under the normal rules. There is a special rule for internet-based companies like ours and it requires us to register and collect VAT on any transactions with “consumers.” Since the clients who use Upwork are not considered consumers in this case, we are not required to collect tax on our transactions with them. Instead those using Upwork as a client should self report the amount of services purchased from Upwork using the reverse charge reporting mechanism. The reverse charge requires the client to report the VAT they should have paid, but should not result in any additional tax payment. Please contact a trusted tax advisor to learn more; we cannot provide tax advice.
Responses Linked to Specific Countries
Malta: If a Freelancer sends us what appears to be a Certificate from a Ministry of Finance, we would advise that we still need a VIES VAT number.
- "The VAT certificate you sent refers to a VAT registration under article 11 of the Maltese VAT Act which is the registration applying to Small Undertakings for persons whose turnover does not exceed certain thresholds. Notwithstanding this however, any person who is in such case required in terms of law to reverse charge VAT in Malta, is still required to register under article 12 of the VAT Act, also when such person is already registered under article 11. Once registration under article 12 is made, the VAT department will issue another VAT certificate with a VAT number with an "MT" prefix which can be used for intra-community transactions (when a person is already registered under article 11 as a small undertaking, he would normally be given the same VAT number but with an "MT" prefix). The Art 12 registration should be verifiable in VIESas discussed by us.
- The fact that the customer is in possession of a VAT certificate as provided in your email to us, indicates that the FL is a VAT taxable person because he is registered for VAT (notwithstanding the fact that in terms of Maltese law such person should register under a different article of the law for it to be able to account for VAT under the reverse charge mechanism). Technically it could therefore serve as proof that we are dealing with a Vat taxable person, but this may still be considered insufficient by the Maltese administration since they would issue an EU formatted VAT ID number in case someone is engaged in reportable intracommunity or international transactions. This seems not the case here. Our Maltese counterpart therefore advised to stick with the VIES approach, as discussed by us.
Lithuania: Users may argue that they are under a certain threshold and that VAT does not apply.
- Yes, we understand that VAT registration in Lithuania is compulsory if annual turnover is above the registration threshold (EUR 45,000) and VAT registration is optional for any taxable person that has a taxable turnover that is not expected to exceed EUR 45,000. This applies to services that you may provide to your client. However, based on Directive 2006/112/EC, Upwork is obligated to charge VAT on electronically supplied services provided by Upwork (e.g. use of the Upwork platform) to users if a user does not have a VIES formatted VAT number.
- Following bullets for internal use only
- VAT registration in Lithuania is compulsory if annual turnover is above the registration threshold (EUR 45,000). This threshold is applicable to all taxable persons including freelancers (self-employed persons).
- Voluntary VAT registration is optional for any taxable person that has a taxable turnover that is not expected to exceed EUR 45,000. Thus freelancers may register for VAT on a voluntary basis. In addition, please note that freelancers (self-employed persons) should possess a self-employment certificate (document certifying that a person has registered his business activities at the local State Tax Inspectorate and is entitled to perform the activities indicated in the certificate). In our view, a freelancer could provide a copy of the certificate to Upwork. However, it should be noted that the certificates will be in Lithuanian language and that there is no possibility to verify them online.
- You can charge VAT if they do not provide a VIES formatted VAT ID that comes back valid through VIES.
France: If a user argues they are a French auto-entrepreneur, the first response from our CS agents should still be to point the user to FAQ #7 . However, if the user still pushes back, our law firm has provided the following response that we can send to the user.
- English Version
- French businesses that purchase services from foreign services providers who are not themselves liable for French VAT are required to self-assess French VAT on VAT returns including in the case where these French businesses are not liable for the tax on their own turnover. If these French businesses are not yet VAT registered (such as exempt businesses, small businesses subject to the VAT relief ruled by Article 293 B of the French tax code), they have to apply for a VAT identification number using the following form http://bofip.impots.gouv.fr/bofip/1147-PGP to be filed to the tax authorities. Subsequently they will have to file VAT returns where they will declare the VAT due on their purchases of services. In the absence of VAT number we will assume that we are dealing with a non-business and we will charge French VAT accordingly.
- French Version
- Les entrepreneurs français qui achètent des services auprès de prestataires de services étrangers non redevables de la TVA en France, sont tenus d’autoliquider la TVA française sur des déclarations de chiffres d’affaires (TVA), même lorsque ces entrepreneurs français ne sont pas tenus de payer la TVA sur leur propre chiffre d’affaires. Si ces entrepreneurs français ne sont pas déjà identifiés à la TVA ( par exemple les entreprises exonérées de TVA, les bénéficiaires de la franchise en base visée à l’article 293 B du CGI), ils doivent solliciter la délivrance d’un numéro de TVA en utilisant le formulaire suivant : http://bofip.impots.gouv.fr/bofip/1147-PGP à déposer auprès des services fiscaux. Ppar la suite ils devront déposer des déclarations de TVA où ils acquitteront la TVA sur leurs achats de services. En l’absence de numéro de TVA, nous considèrerons que nous traitons avec des particuliers et nous facturerons la TVA française à nos clients.
A law was introduced in Belarus where a Value Added Tax (VAT) is applied to sales of electronic services from non-Belarusian businesses (like Upwork) to Belarusian consumers.
Upwork started charging VAT on our sales to freelancers and agencies in Belarus on March 1, 2019. VAT charges will NOT apply to those who are operating as a legal entity in Belarus on Upwork.
To confirm whether a user is a representative of a legal entity, freelancers and agencies in Belarus will be asked to confirm if they are using Upwork for a legal entity and enter their corresponding Taxpayer Identification Number (TIN).
Upwork will verify the information provided by each user and will send users an email within 3 days letting them know if the information has been validated or declined.
- For freelancers and agencies that have entered a valid taxpayer identification number for the legal entity, Upwork will not charge this tax but will print “VAT Reverse Charged” on their invoice and they may be required to self-assess VAT on their VAT return under the reverse-charge mechanism applicable to e-services.
- For freelancers and agencies that are NOT a representative of a legal entity, a 20% VAT will be applied to the fees (e.g. Upwork service fees, membership fees, or purchases of additional Connects). Per Belarusian law for digital services, the 20% VAT will be added to the applicable Upwork fees and will appear on your invoices as one bundled fee.
- No change for clients in Belarus.
How VAT is charged for FLs and Agencies in Belarus?
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s service fee is $100 x 20% = $20 E-services VAT to be paid to the Belarus government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Take-home earnings after fees and VAT | $76.00 |
In other words, considering the example above, the user will only be charged VAT on the $20 freelancer service fee, so they will be charged $4 for VAT. These amounts will appear on their invoices and Transaction History and will be calculated in U.S. Dollars.
What is e-services VAT, and how does this affect me?
Thanks for your question. Value Added Tax, or VAT, is a tax that Belarus (and other countries) assess on the sales of goods and services, including electronic services (e-services). This means that Upwork will charge VAT on our fees charged to freelancers and agencies in Belarus, unless they are operating as a legal entity in Belarus.
If you are operating as a legal entity on Upwork, please enter your taxpayer identification number (TIN).
We will send you an email in a few days letting you know whether we were able to validate the number or not. Once validated, you will not be charged VAT by Upwork. We will print “VAT Reverse Charged” on your invoice, however, and you may be required to self-assess VAT on your VAT return under the reverse-charge mechanism applicable to e-services.
If you are using Upwork as an individual entrepreneur and not for a legal entity, a 20% VAT will be applied to the following:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will NOT be charged VAT on any withdrawal fees you pay.
Here’s a simple example of how it would work if your freelancer service fee is currently 20%:
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s service fee is $100 x 20% = $20 E-services VAT to be paid to the Belarus government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Your take-home earnings after fees and VAT | $76.00 |
In other words, considering the example above, you will only be charged VAT on the $20 freelancer service fee you pay, meaning you will be charged $4 for VAT. These amounts will appear on your invoices and Transaction History and will be calculated in U.S. Dollars. Examples are provided for illustrative purposes only.
How is VAT calculated, and what will I be charged?
Thanks for your question. You will be charged a 20% VAT on:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will NOT be charged VAT on any withdrawal fees you pay.
Here’s a simple example of how it would work if your freelancer service fee is currently 20%:
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s service fee is $100 x 20% = $20 E-services VAT to be paid to the Belarus government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Your take-home earnings after fees and VAT | $76.00 |
Examples are provided for illustrative purposes only.
How do I know that Upwork is remitting my VAT to the Belarusian government?
Thanks for your question. The Ministry of Taxes and Duties of the Republic of Belarus keeps track of all companies that have registered to pay VAT. You can find Upwork Global Inc. on the list here, by selecting “List of Foreign Companies.”
How do I prove that I am a Belarusian legal entity?
Thanks for reaching out. Freelancers and agencies will be asked to provide a Tax Identification Number (TIN) on the Tax Information page within your “User Settings.” You can add a TIN number at any time, even if you declined to do so initially.
I am an individual entrepreneur, I should not be subject to VAT.
Thanks for reaching out. The Belarusian government requires that Upwork pay VAT on sales of electronic services to any freelancer or agency that is not a representative of a legal entity. If you don’t think you should be subject to VAT, please consult a tax advisor to discuss the matter.
Why are you only starting to charge VAT now?
Thanks for your question. A law was passed in Belarus where VAT is now charged to Belarusians when they purchase e-services from non-Belarusian businesses (like Upwork). To comply with this law, we need to collect VAT on the services we provide to freelancers and agencies and forward this tax to your tax authorities.
How do I update my profile to show that I am a legal entity or a representative of a legal entity ?
Thanks for your question. You can delete or update your TIN and legal entity information any time by going to your “User Settings” and then “Tax Information.”
Where can I find my VAT invoice?
Thanks for reaching out. You can find your VAT invoice in “Reports” by clicking through to “Transaction History,” which is under “More Reports.”
Why has my service fee increased?
Thanks for your question. We have not increased freelancer service fees. However, a law was passed in Belarus where VAT is now charged to Belarusians when they purchase e-services from non-Belarusian businesses (like Upwork). To comply with this law, we need to collect VAT on the services we provide to freelancers and agencies and forward this tax to your tax authorities.
Am I required to input my TIN number/be a legal entity?
Thanks for reaching out. Upwork does not require freelancers to have a TIN number or be operating as a legal entity to work on our platform. You will not be penalized or face account suspension if you do not provide a TIN number and legal entity information. If you do not enter a TIN number and legal entity information, a VAT charge will be applied to Upwork freelancer service fees, premium membership fees and the purchase of additional Connects. You’ll be charged the VAT amount applicable to the country listed on your profile.
What happens to my VAT if I move to a different country?
Thanks for your question. If you move to a country without VAT (or with a different VAT rate) you should update your address on your Upwork profile. We will automatically adjust your VAT to correspond with the rates of the new country you reside in or, if no VAT is due, stop charging you the tax.
How long does it take for Upwork to validate TIN numbers and legal entity status?
Thanks for reaching out. It can take up to 3 business days for your TIN number and legal entity information to be validated. We’ll send you an email update as soon as possible.
If my TIN number is pending verification and I make a transaction, will I be exempt from the VAT charge?
Thanks for your question. You will be charged VAT until we are able to validate your TIN number and legal entity information.
You emailed to say that my TIN number and legal entity information was declined. Why?
COMMUNITY/SOCIAL: Thanks for reaching out. Please review the email we sent you for more information about why your information was declined.
CS: Provide detailed response.
If my legal entity information is validated, does that mean I’m exempt from paying VAT?
Thanks for your question. If your legal entity information is validated, Upwork is not required to collect VAT from you. We suggest consulting your tax advisor to understand your specific VAT responsibilities.
Will VAT be remitted to my local government in my name or in Upwork's name?
Thanks for your question. We report and remit the VAT amounts we collect to the Belarusian government under Upwork’s name. Individual freelancers and agencies are not identified on the VAT tax return that we submit.
Is this just a way for Upwork to earn more money?
Thanks for reaching out. No, we do not keep any of the VAT that we collect. We are required by law to collect it from you and remit it to the Belarusian government.
What currency is the VAT charged in?
Thanks for your question. All VAT fees are calculated in U.S. Dollars.
Why is Upwork doing this? Isn't it a violation of your Terms of Service - I'm solely responsible for tax, see 6.7 of the TOS.
Thanks for your question. Upwork is required by Belarusian tax law to collect VAT based on our charges to you. You are solely responsible for taxes for your own sales to your clients. For this reasons, this is not a violation of our Terms of Service. If you have any concerns, however, we suggest you consult a tax advisor.
Upwork should provide proof/verification that you’ve paid the taxes to the proper authorities. How do I know Upwork isn’t just stealing more of my money?
Thanks for your question. We are required by law to collect and remit this tax to the Belarusian government. The Ministry of Taxes and Duties of the Republic of Belarus keeps tracks of all companies that have registered to pay VAT. You can find Upwork Global Inc. on the list here, by selecting “List of Foreign Companies.”
What happens in a situation where a refund is issued?
Thanks for reaching out. In cases where a freelancer issues a refund to a client, we will refund the entire the VAT amount that was paid by the freelancer.
What happens in a case when my local VAT is different from my client’s local VAT?
Thanks for your question. Any fees your client pays are completely separate and you will only pay VAT on the following:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will NOT be charged VAT on any withdrawal fees you pay.
Is there an income threshold for collecting VAT from consumers in Belarus?
Thanks for reaching out. Per Belarusian tax law, we must collect VAT on all e-services we provide you. Your income is not considered.
Will there be any plans to charge VAT or similar taxes in other countries too?
Thanks for your question. Plans to charge similar taxes in other countries are evaluated on a country-by-country basis.
Will I need to give Upwork any other official identifying information?
Thanks for reaching out. We will only be collecting your TIN number and legal entity information for the purpose of identifying those who will not be subject to VAT. No other information is needed for this purposes. We may request additional information from time to time for identity verification.
How can I be sure VAT is calculated correctly?
Thanks for your question. You can see the VAT calculation breakdown in your transaction descriptions, as well as on your invoices.
Will Upwork be automatically monitoring and adjusting rates for all country-specific VAT?
Thanks for reaching out. Yes, we will adjust the VAT you’re charged if your government changes the rate.
How often do you submit VAT payments to the government?
Thanks for your question. We report and submit VAT payments to your government on a quarterly basis or otherwise as required by the government.
What is your security like on encrypting our TIN number and legal entity informations? In some countries, it’s considered as private as a Social Security number.
Thanks for your question. We take your security very seriously at Upwork. All TIN number and legal entity information is handled in accordance with our Terms of Service and strict security practices.
Are withdrawal fees excluded?
Thanks for your question. You will NOT be charged VAT on any withdrawal or wire fees you pay.
You will only be charged VAT on:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
A law was introduced in Russia where a Value Added Tax (VAT) is applied to sales of electronic services from non-Russian businesses (like Upwork) to Russian consumers.
Upwork started charging VAT on our fees charged to all freelancers and agencies in Russia on April 25, 2019.
All freelancers and agencies will be charged, a 20% VAT will be applied to the fees we collect (e.g. Upwork service fees, membership fees, or purchases of additional Connects). Per Russian law for digital services, the 20% VAT will be added to the applicable Upwork fees and will appear on your invoices as one bundled fee.
Here’s a simple example of how it would work if your freelancer service fee is currently 20%:
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s freelancer service fee is $100 x 20% = $20 E-services VAT to be paid to the Russia government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Take-home earnings after fees and VAT | $76.00 |
In other words, considering the example above, the user will only be charged VAT on the $20 freelancer service fee, so they will be charged $4 for VAT. These amounts will appear on their invoices and Transaction History and will be calculated in U.S. Dollars.
What is electronic services VAT, and how does this affect me?
Thanks for your question. Value Added Tax, or VAT, is a tax that Russia (and other countries) assess on the sales of goods and services, including electronic services (e-services). This means that Upwork will charge VAT on our fees charged to freelancers and agencies in Russia.
What will the VAT charge look like on my invoice?
The 20% VAT will be applied to the following:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will not be charged VAT on any withdrawal fees you pay.
Here’s a simple example of how it would work if your freelancer service fee is currently 20%:
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s freelancer service fee is $100 x 20% = $20 E-services VAT to be paid to the Russia government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Take-home earnings after fees and VAT | $76.00 |
In other words, considering the example above, you will only be charged VAT on the $20 freelancer service fee you pay, meaning you will be charged $4 for VAT. These amounts will appear on your invoices and Transaction History and will be calculated in U.S. Dollars. Examples are provided for illustrative purposes only.
How will VAT be calculated, and what will I be charged?
Thanks for your question. You will be charged a 20% VAT on:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will not be charged VAT on any withdrawal fees you pay.
Here’s a simple example of how it would work if your freelancer service fee is currently 20%:
| Your contract amount | $100.00 |
|
Upwork service fee (including VAT) Upwork’s freelancer service fee is $100 x 20% = $20 E-services VAT to be paid to the Russia government by Upwork is $20 x 20% = $4 Total fees including VAT is $20 + $4 = $24 |
-$24.00 |
| Take-home earnings after fees and VAT | $76.00 |
Examples are provided for illustrative purposes only.
I don’t think I should have to pay VAT.
Thanks for reaching out. The Russian government requires that Upwork collect VAT on sales of electronic services to any freelancer or agency. If you don’t think you should be subject to VAT, please consult a tax advisor to discuss the matter.
Is it possible to be exempt from VAT?
Thanks for your question. No, there are no VAT exemptions in Russia that relate to services provided by Upwork. As of January 1, 2019, foreign suppliers of electronic services to private consumers, companies, and individual entrepreneurs are required to collect and remit VAT.
Are you adding VAT for clients?
Thanks for your question, VAT is currently not collected from clients who use Upwork to find freelancers.
Why are you charging VAT now?
Thanks for your question. In 2019, a law was passed in Russia where VAT is now charged to all Russians when they purchase e-services from businesses (like Upwork). To comply with this law, we need to collect VAT on the services we provide to freelancers and agencies and forward this tax to your tax authorities.
What if I'm only residing in Russia temporarily?
For VAT purposes the consumer of e-services (individual) is treated as being in Russia if at least one of the following conditions are met:
- The consumer (individual) resides within Russia
- Payment is made through a bank/payment operator located in Russia
- The consumer used a Russia IP address
- The consumer purchasing or paying for e-services used a telephone number with a Russian telephone country code
If at least one of the mentioned conditions is met Upwork is required to assess VAT on services provided by our company to you. This applies even if you are a digital nomad and only temporarily residing in Russia. Every time you officially register in a different country, you should update your information on Upwork to reflect your current location.
What happens to my VAT if I move to a different country?
Thanks for your question. If you move to a country without VAT (or with a different VAT rate) you should update your account information on Upwork to reflect your current location. We will automatically adjust your VAT to correspond with the rates of the new country you reside in or, if no VAT is due, stop charging you the tax.
In the example provided in your Help Center, why does it appear that Upwork is increasing the service fees?
Thanks for your question. We have not increased freelancer service fees. However, a law was passed in Russia where VAT is now charged to Russians when they purchase e-services from businesses (like Upwork). To comply with this law, we need to collect VAT on the services we provide to freelancers and agencies and forward this tax to your tax authorities.
Is this just a way for Upwork to earn more money?
Thanks for reaching out. No, we do not keep any of the VAT that we collect. We are required by law to collect it from you and remit it to the Russian government.
What currency is the VAT charged in?
Thanks for your question. All VAT fees are calculated in U.S. Dollars.
Why is Upwork doing this? Isn't it a violation of your Terms of Service - I'm solely responsible for tax, see 5.5 of the TOS.
Thanks for your question. Upwork is required by Russian tax law to collect VAT based on our charges to you. You are solely responsible for taxes for your own sales to your clients. For this reason, this is not a violation of our Terms of Service. If you have any concerns, however, we suggest you consult a tax advisor.
What happens in a situation where a refund is issued on Upwork?
Thanks for reaching out. In cases where a freelancer issues a refund to a client, we will refund the entire the VAT amount that was paid by the freelancer.
What happens in a case when my local VAT is different from my client’s local VAT?
Thanks for your question. Any fees your client pays are completely separate and you will only pay VAT on the following:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
You will not be charged VAT on any withdrawal fees you pay.
Is there an income threshold for collecting VAT from consumers in Russia?
Thanks for reaching out. Per Russian tax law, we must collect VAT on all e-services we provide you. Your income is not considered.
Will there be any plans to charge VAT or similar taxes in other countries too?
Thanks for your question. Plans to charge similar taxes in other countries are evaluated on a country-by-country basis.
Will Upwork be automatically monitoring and adjusting rates for all country-specific VAT?
Thanks for reaching out. Yes, we will adjust the VAT you’re charged if your government changes the rate.
Are withdrawal fees excluded?
Thanks for your question. You will not be charged VAT on any withdrawal or wire fees you pay.
You will only be charged VAT on:
- Freelancer service fees
- Any Connects purchases
- Any membership fees
What information about me are you sharing with Russian Tax authorities?
Thanks for reaching out. We are not sharing any freelancer information with the Russian government. We are only reporting the VAT amount collected by Upwork.
Why is there no VAT option (to add VAT ID) in Tax information settings?
This is by design.
Please be sure to use Taxes > US Sales Tax for all US Sales Tax inquiries.
Be sure to avoid sharing specific job category types or tax rate percentages with customers.
For the most up-to-date information on US taxes, please be sure to review our external help resources which also include FAQs for our customers:
“State Sales Tax” on transaction history / invoices = US Sales Tax
“Marketplace Facilitator Sales Tax” on transaction history / invoices = NOT US Sales Tax, please see the “US Marketplace Facilitator Tax” drop-down below.
Upwork may be required to collect US sales taxes from the following states: District of Columbia, Hawaii, Maryland, New Mexico, South Carolina, South Dakota, Tennessee, Washington, Texas, Ohio, Connecticut, Mississippi, Rhode Island, Utah, West Virginia, & Illinois (city of Chicago).
The following transactions may be subject to taxes in one or more US states:
Client:
- Client Membership Fees
- Premium Job Posts
- Payment Processing Fees
- Enterprise Billing Fees
- Enterprise Service Fees
- Enterprise Subscription Fees
- Conversion Fee
- Marketplace Fees
Freelancer/Agency:
- Freelancer Service Fees
- Membership Fees
- Connect Fees
- Conversion Fees
The US sales tax additions that took place from Sept to Oct 2022:
- 9/9/2022, email message on sales tax for FLs and Ent CLs in Texas
- Tax application start, if applicable = 9/22/2022
- 10/3/2022, email message on sales tax for FLs and Ent CLs in Connecticut, District of Columbia, and Ohio
- Tax application start, if applicable = 10/17/2022
This new addition to US Sales Tax applies specifically to freelancers as well as Enterprise clients. INTERNAL ONLY:This tax only applies to jobs related to data processing services based on the definition of said service in the state they live in.
For Enterprise clients, if applicable, the following may be taxed: subscription fees, non-BYO service fees, and BYO service fees.
For freelancers, if applicable, the following may be taxed: freelancer service fees.
Please follow the direction under the main “US Sales Tax” section above for resources, FAQs, and proper ZD category options. Be s
The US sales tax additions that took place in Dec 2022 received emails on 12/1/2022 with tax application, if applicable, starting 12/15/2022:
- Email message on sales tax (coupled with MFT taxes message) for Marketplace CLs and Any Hire CLs in Mississippi, Rhode Island, Utah, and West Virginia
- Email message on sales tax for Marketplace CLs in Illinois (City of Chicago)
This new addition to US Sales Tax is adding additional states that may be subject to US sales tax charges.
Please follow the direction under the main “US Sales Tax” section above for resources, FAQs, and proper ZD category options. Be sure to avoid sharing tax rate percentages with customers.
Please be sure to use Taxes > MFT for all Marketplace Facilitator Sales Tax inquiries.
Be sure to avoid sharing specific job category types or tax rate percentages with customers.
For the most up-to-date information on US taxes, please be sure to review our external help resources which also include FAQs for our customers:
“State Sales Tax” on transaction history / invoices = NOT MFT, please see the “US Sales Tax” drop-down above.
“Marketplace Facilitator Sales Tax” on transaction history / invoices = Marketplace Facilitator Sales Tax aka MFT
MFT additions took place from Aug to Dec 2022:
-
8/2022, email message on MFT for marketplace CLs in Texas
- Tax application start, if applicable = 8/15/2022
-
9/22/2022, email message on MFT for marketplace CLs in Texas, Connecticut, Hawaii, Maryland, Massachusetts, New Mexico, New York, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Washington, and District of Columbia
- Tax application start, if applicable = 9/29/2022
- 12/1/2022, email message on MFT (coupled with US sales taxes message) for marketplace CLs in Mississippi, Rhode Island, Utah, and West Virginia.
This tax only applies to marketplace clients, excluding project catalog jobs. Please see here for the most up-to-date client-facing information on MFT: U.S. Sales Tax for Clients.
NOT applicable for this tax = Upwork service fees such as memberships, Connects, payment processing fees, marketplace fees, Enterprise fees, etc.
Applicable for this tax = any payments made to their freelancers
Many US States now require marketplace businesses to collect and remit sales tax when sales are made to purchasers (clients) located in these states. Upwork is responsible for implementing Marketplace Facilitator Tax in various US jurisdictions. This tax rule requires Upwork to charge and collect sales tax from clients buying services from freelancers.
This applies to any client in the above states hiring in certain categories and in certain locations regardless of the freelancer location.
REMINDERS:
Take care to refer to MFT as “Marketplace Facilitator Sales Tax” specifically.
This is because referring to it as just a “Sales Tax” can cause confusion with our customers. There is already a transaction line item called “Sales Tax” that is a different entity (unlike the MFT, it’s charged from the “Marketplace Fee”).
The MFT is charged to the amount paid to the freelancer.
When explaining MFT to customers, be sure to clarify that this tax is charged to the amount paid to their freelancer. You may guide them to view it in their Transaction History, see screenshots below.
FAQs:
What is the difference between the sales tax and the marketplace facilitator sales tax?
The marketplace facilitator sales tax is a type of sales tax, and freelancers do not pay it. As a client, if your state requires us to collect the marketplace facilitator sales tax, it will only be assessed on the payments you make to your freelancers.
Keep in mind, both clients and freelancers may be assessed other sales taxes based on their location and other factors. In cases where we collect taxes, we do not keep the payments. The payments are forwarded to the government entity that requires us to collect it.
Who pays the marketplace facilitator sales tax, the client, the freelancer, or both?
Only the client is assessed the marketplace facilitator sales tax. Note: We do not keep this tax, it is forwarded to the government entity that requires us to collect it.
When is the marketplace facilitator sales tax assessed?
If we are required to collect it, the marketplace facilitator sales tax is assessed on the certain amount the client pays to their freelancer. The client is charged this tax, and we forward it to the government entity that requires us to collect it.
Why is the marketplace facilitator sales tax passed to clients? Why doesn’t Upwork cover this cost?
Since these taxes are the responsibility of those who use the Upwork platform, we cannot cover them. Also, since tax charges can vary widely based on location––and some users aren’t required to pay any––it would be unfair to other users.
Are freelancers responsible for collecting (from clients) any marketplace facilitator sales tax that was due before Upwork started collecting it?
If you have concerns about your tax situation, please consult with your legal or tax advisor.
Can Upwork share the list of states and tax rates that will be applied?Given the complexity and variance, we are not in a position to provide tax rates for every specific location. Please refer to your state and local government’s tax website or consult a tax professional for more information.
MFT Transaction History View
MFT Transaction OBO View
MFT Transaction > Invoice View
Effective June 1, 2020, Upwork is required to collect Tax from freelancers, agencies and clients doing business from Mexico. There are 2 types of taxes that need to be applied:
- Upwork needs to start withholding income tax for our Freelancers and agencies. If they provide their tax id (RFC) the rate is 1%. If no id is provided then Upwork needs to withhold at a special rate of 20%.
- Freelancers and clients located in Mexico will be subject to 16% VAT when purchasing subscriptions, Connects and services on Upwork.
Timeline:
Collection of tax ids & SMF Messaging will be February 15, 2021
Withholding of tax would be at the earliest April 1, 2021
Collect of VAT on Upwork purchase at the earliest April 2021
SMF (a message on our site) for FLs/agencies with no tax ID provided or removed (2/15)
In compliance with Tax Law in Mexico, Upwork withholds a 1% Income Tax from your payments. The tax withheld is increased to 20% if you haven't already provided your RFC (Registro Federal de Contribuyentes). Please click here to add your RFC information asap. For more details, read our FAQs.
Collection of Mexico Tax ID (2/15)
Upwork Freelancers & Agencies can enter their Clave en el Registro Federal de Contribuyentes (RFC) on the existing Tax Information section here:
An error message will appear if the format is not accurate for the individual or business
Individual Format:
- 13-digit alphanumeric entry, i.e., A A A A # # # # # # E E E
- # = Numeric A = Alphabetic, and E = Either
- The last three digits can be either # or A
Business Format
- 12-digit alphanumeric entry, i.e., A A A # # # # # # E E E
- # = Numeric A = Alphabetic, and E = Either
- The last three digits can be either # or A
Withholding Flow (4/1)
Freelancer payment is subject to the withholding when tax residence country in Mexico & invoice payment is for a Fixed Price, Hourly, Bonus or Misc Payment.
Determine rate % to be applied.
- If RFC is NOT entered then 20%
- If RFC is present then 1%
Sample Calculation for a FL on a Fixed Contract
FL based in Mexico receives payment of US $ 80 from a client with a 15% Upwork service fee.
|
Transactions |
Tax id Provided (Amounts in USD) |
Tax id NOT Provided (Amounts in USD) |
|
Upwork Earnings |
$80 |
$80 |
|
Applicable Withholding Rate |
1% |
20% |
|
Withholding for this transaction ($80 * Withholding Rate) |
$0.80 |
$16 .00 |
|
Service Fee for this transaction (15%) |
$12.00 |
$12.00 |
|
VAT on the Service fee (16%)* |
$1.92 |
$1.92 |
|
Payment to FL |
$65.28 |
50.08 |
VAT Taxable Charges (After 4/1)
|
Freelancers & Agencies |
Clients |
|
Taxable |
Taxable |
|
Membership Fees |
Client Membership Fees |
|
Connect Fees |
Premium Job Posting |
|
Tiered Service Fees |
Payment Process Service Fee |
|
Non-Taxable |
Enterprise Billing Fee |
|
Withdrawal Fees |
Enterprise Service Fees |
|
Enterprise Subscription Fees |
|
|
Conversion Fee |
When will Upwork collect Mexican income tax withholding?
Thanks for your question. We expect to begin collecting this tax on April 1, 2021, but it may be a bit later.
Do you withhold the tax before or after freelancer service fees are charged?
Thanks for your question. The withholding tax is calculated based on the gross amount that you invoice your client, so it is calculated prior to freelancer service fees or any other fees that may reduce the amount credited to your account.
I am a freelancer in Mexico but I don’t think I have to pay any Mexican income tax. What should I do?
Thanks for reaching out. Unfortunately, we cannot provide specific tax advice. Since we want to make sure you receive the specific information you need, we suggest you contact a trusted tax advisor.
I am a freelancer in Mexico and I think I’m being charged the wrong withholding tax. What should I do?
Thanks for your question. We are required to withhold a specific percentage of your earnings, as defined by Mexican law. Since we want to make sure you receive the specific information you need, we suggest you contact a trusted tax advisor. We cannot provide tax advice.
What if I end up paying more in taxes than required?
Thanks for reaching out. You will be able to claim a tax credit or refund from the Mexican government should you pay more taxes than required. (Unfortunately, we cannot provide specific tax advice. Since we want to make sure you receive the most accurate information, we suggest you contact a trusted tax advisor.)
What does Upwork do with the money that it withholds? Is this just a way for Upwork to make more money?
Thanks for your question. No, we do not keep the funds withheld under this tax law. We are required to forward any tax we collect from our users to the Mexican government.
Does Upwork also need to collect VAT (Value Added Tax) on transactions in Mexico?
Thanks for your question. The same legislation that requires us to collect income tax also imposes VAT collection on certain digital services transactions. We are currently working to determine which transactions are subject to VAT collection.
Once we’ve determined when VAT collection will be required, we will reach out to our users in Mexico with more information.
EMAIL TO BE SENT TO FREELANCERS/AGENCIES IN MEXICO
Subject: Important: Mexican Withholding Tax on Upwork Earnings
Hi [xxxxx],
At Upwork, we know how important it is for you to be prepared for any change that may impact your pay.
As a result, we are writing to let you know that as of April 1, 2021, we plan to begin withholding an income tax from payments to freelancers and agencies based in Mexico. We are now required by Mexican law to collect this tax and send it to tax authorities there.
While this might be unwanted news, you can control how much tax we withhold by providing your Income Tax Identification number (RFC) to us.
The Mexican government requires us to obtain a Clave en el Registro Federal de Contribuyentes (RFC) from you. Under the law, which became effective June 1, 2020, those who provide a valid RFC number are subject to significantly lower tax withholding.
- If you provide a valid RFC number we will withhold 1% of all your Upwork earnings, starting with all payments made on or after April 1, 2021.
- If you don’t provide a valid RFC number we will withhold 20% of all your Upwork earnings, starting with all payments made on or after April 1, 2021.
Important to know: You will be able to claim a tax credit or refund from the Mexican government should you pay more taxes than required. (You may wish to consult with a trusted tax expert or advisor for specific advice, unfortunately we can’t provide tax help.)
Add Income Tax Identification now
We also want to take this chance to let you know the same legislation included adding a Valued Added Tax (VAT) on digital services. Right now we are working to understand if we are required to collect VAT and remit it to Mexican tax officials. We will keep you posted on that.
To learn more about Mexican income tax withholding, click here.
Thanks for using Upwork!
Regards,
The Upwork Team
Help Center article - Canada Goods and Services Tax (link will go live once published)
To be in compliance with Canadian tax authorities, we're charging Goods and Services Tax (GST) on Upwork fees charged to “Consumers” in Canada.
Canada has proposed a law change requiring Upwork (and other foreign marketplace companies) to collect GST on fees charged to Canadian freelancers, agencies and clients who are not registered for GST in Canada.
Timeline:
-
- Friday September 10th - Web page and Community Announcement release
- Monday September 13th - UI Release
- Tuesday September 14th - Email Send
Canada taxes “consumers” like the EU
Any User that has provided Upwork with a valid Tax ID is not a “consumer” and therefore is not subject to tax.
NOTE: Tax IDs in Canada are a Business Number or a QST Number for entities in Quebec
Differences from our approach in EU
- Unlike the EU, there are different rates within the same country (Province location will drive tax rate)
- Rather than ask the Platform to perform the tax calculation, we will be using the third-party tax engine we use for US sales tax (Vertex)
- Canadian Clients will be required to provide a Tax ID or the tax will apply (for the EU we assume all clients are businesses, and so VAT is not applied to any clients)
Taxable Charges
|
Freelancers & Agencies |
Clients |
|
Taxable |
Taxable |
|
Service Fees |
Payment Processing Fees |
|
Connects |
Premium Job Posts |
|
FL Membership Fees |
Client Membership Fees |
|
Non-Taxable |
Enterprise Fees |
|
Withdrawal Fees |
Conversion Fees |
User Interface
Tax ID form:
Tax form will be available in the user’s Settings > Tax information.
Transaction details:
Invoice:
For Freelancers
We are required to collect these taxes on the services we provide to freelancers, agencies, and clients in Canada and forward this tax to the Canadian tax authorities. We do not collect the tax on the payments clients make to their freelancers on Upwork.
What is GST?
GST is the Goods and Services Tax, a type of value-added tax levied by the Canadian government on various goods and services, including Upwork’s digital services.
What is HST?
HST is the Harmonized Sales Tax, a combination of GST and similar provincial-level taxes in Canada. It is a type of value-added tax levied on various goods and services, including the digital services that we offer. It’s currently levied in Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
What is PST?
PST is Provincial Sales Tax, a type of value-added tax in Canada that is levied on various goods and services, including the digital services that we offer. It is levied, in addition to GST, in British Columbia, Saskatchewan, and Manitoba.
What is QST?
QST is Quebec Sales Tax, a type of value-added tax levied on various goods and services, including the digital services that we offer, in the Province of Quebec. It is levied in addition to GST.
Why is Upwork collecting Canadian GST (HST/QST/PST)?
Thanks for asking. A law was passed in Canada which requires non-resident businesses, such as Upwork, to collect GST and similar provincial-level taxes from individuals and businesses operating in Canada when they purchase taxable digital products or services. To comply with this law, we need to collect these taxes on the services we provide to freelancers, agencies, and clients in Canada and forward this tax to the Canadian tax authorities. We do not collect the tax on the payments clients make to their freelancers on Upwork.
I'm exempt from paying GST in Canada. Are you still going to charge me?
Thanks for your question. Upwork is required to collect GST from Canadian consumers and Canadian businesses who are not registered under the normal GST/HST regime. If you have a GST/HST and/or QST Number, you are not considered a consumer by the Canadian government. Add your valid GST/HST or QST Number here and we will not collect this tax from you.
PST in British Columbia and Sasketchwan will apply to all transactions because there are currently no such exemptions in those provinces. Manitoba’s PST law goes into effect in December 2021 and may not apply without exception.
What if I'm only residing in Canada temporarily?
Thanks for asking. We are required to assess GST on services provided by our company to anyone receiving such services in Canada. This applies even if you are a digital nomad and only temporarily residing in Canada.
Any time you move to a different country, even if temporarily, you should update your tax residency information on Upwork. For example, if you move to and work from South Africa, you may be subject to South African laws. If you then move to Canada, Canadian GST will be assessed accordingly once you update your address. Please consult a tax professional if you have questions as to whether and how the GST applies to you and your business.
Can I use my Business Number?
No, you can’t — a business number does not exempt you from GST. To be exempt from GST, a GST/HST, or QST number is required. A Business Number is a completely separate business identifier and has no bearings on these taxes.
What is a GST/HST Number?
In Canada, a GST/HST number is a business identifier meant to help simplify tax dealings with the Canadian government. To learn more or to register for a GST/HST number, click here.
What is a QST Number?
In Canada, a QST Number is a business identifier meant to help simplify dealings with the Quebec provincial government. To learn more or to register for a QST Number, click here.
Do you share my information with the Canadian tax authorities?
Thanks for asking. We do not share any freelancer information with the Canadian government. We only report the amount in taxes collected by Upwork.
What if I don’t add my number before collection begins? Can I add it later?
Thanks for asking. You can add your GST/HST or QST Number at any time beginning in September 2021. If GST tax collection begins before you add your number, we will be required to collect these taxes but will stop once you add your valid number.
Please note that all value-added tax we collect is remitted directly to the government. We cannot refund taxes that we collected from you before you added your number.
I didn’t have my number on file and you collected GST. Can I claim those amounts when I file my taxes?
Thanks for asking. Under the new rule, you cannot claim a credit once GST/HST and QST have been collected because Upwork is a digital company based outside of Canada.
If you had a valid GST registration at the time of transaction, but did not file the information under the “Tax Information” section of your profile, our support team may be able to help you further.
To avoid being charged GST, it is very important that you have your GST/HST and QST number on file with us before collection begins in October 2021.
We cannot provide specific tax advice, so we recommend that you consult your local tax advisor with specific questions or for more details on how this may affect your business.
For Clients
Does Upwork charge GST to all clients?
Upwork currently charges GST to all Canada-based clients who do not have a GST/HST or QST number on file with us.
What is GST?
GST is the Goods and Services Tax, a type of value-added tax levied by the Canadian government on various goods and services, including the digital services that we offer.
What is HST?
HST is the Harmonized Sales Tax, a combination of GST and similar provincial-level taxes in Canada. It is a type of value-added tax levied on various goods and services, including the digital services that we offer. It’s currently levied in Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
What is PST?
PST is Provincial Sales Tax, a type of value-added tax in Canada that is levied on various goods and services, including the digital services that we offer. It is levied, in addition to GST, in British Columbia, Saskatchewan, and Manitoba.
What is QST?
QST is Quebec Sales Tax, a type of value-added tax levied on various goods and services, including the digital services that we offer, in the Province of Quebec. It is levied in addition to GST.
Why is Upworking collecting Canadian GST (HST/QST/PST)?
Thanks for asking. A law was passed in Canada which requires non-resident businesses, such as Upwork, to collect GST and similar provincial-level taxes from individuals and businesses operating in Canada when they purchase taxable digital products or services. To comply with this law, we need to collect these taxes on the services we provide to freelancers, agencies, and clients in Canada and forward this tax to the Canadian tax authorities. We do not collect the tax on the payments you make to your freelancers on Upwork.
I'm exempt from paying GST in Canada. Are you still going to charge me?
Thanks for your question. Upwork is required to collect GST from Canadian consumers and Canadian businesses who are not registered under the normal GST/HST regime. If you have a GST/HST and/or QST Number, you are not considered a consumer by the Canadian government. Add your valid GST/HST or QST Number here and we will not collect this tax from you.
PST in British Columbia and Sasketchwan will apply to all transactions because there are currently no such exemptions in those provinces. Manitoba’s PST law goes into effect in December 2021 and may not apply without exception.
What if I'm only residing in Canada temporarily?
Thanks for asking. We are required to assess GST on services provided by our company to anyone receiving such services in Canada. This applies even if you are a digital nomad and only temporarily residing in Canada.
Any time you move to a different country, even if temporarily, you should update your tax residency information on Upwork. For example, if you move to and work from South Africa, you may be entirely subject to South African laws. If you then move to Canada, you should update your Upwork address and Canadian GST will be assessed accordingly. Please consult a tax professional if you have questions as to whether and how the GST applies to you and your business.
Can I use my Business Number?
No, you can’t — a business number does not exempt you from GST. To be exempt from GST, a GST/HST, or QST number is required. A Business Number is a completely separate business identifier and has no bearings on these taxes.
What is a GST/HST Number?
In Canada, a GST/HST number is a business identifier meant to help simplify tax dealings with the Canadian government. To learn more or to register for a GST/HST number, click here.
What is a QST Number?
In Canada, a QST Number is a business identifier meant to help simplify dealings with the Quebec provincial government. To learn more or to register for a QST Number, click here.
Do you share my information with the Canadian tax authorities?
We do not share any client information with the Canadian government. We only report the amount in taxes collected by Upwork.
What if I don’t add my number before collection begins? Can I add it later?
Thanks for asking. You can add your GST/HST or QST Number at any time beginning in September 2021. If GST tax collection begins before you add your number, we will be required to collect these taxes but will stop once you add your valid number.
Please note that all value-added tax we collect is remitted directly to the government. We cannot refund taxes that we collected from you before you added your number.
I didn’t have my number on file and you collected GST. Can I claim those amounts when I file my taxes?
Thanks for asking. Under the new rule, you cannot claim a credit once GST/HST and QST have been collected because Upwork is a digital company based outside of Canada.
If you had a valid GST registration at the time of transaction, but did not file the information under the “Tax Information” section of your profile, our support team may be able to help you further.
To avoid being charged GST, it is very important that you have your GST/HST and QST number on file with us.
We cannot provide specific tax advice, so we recommend that you consult your local tax advisor with specific questions or for more details on how this may affect your business.
Help Center article: Ukraine Indirect Taxes for Clients
Help Center article: Ukraine Indirect Taxes on Freelancers
Project Kickoff - Ukraine Indirect Taxes
To be in compliance with Ukraine tax authorities by charging Tax (VAT) on Upwork fees charged to users in Ukraine and eliminate Upwork’s potential tax liability for uncollected tax.
Timeline
Phase 1: Tax ID collection launch - Dec 15th 2021
Phase 2: Tax collection launch - Jan 26th 2022
Taxable Charges in Scope
|
Freelancers & Agencies |
Clients |
|
Taxable |
Taxable |
|
Service Fees |
Payment Processing Fees |
|
FL Membership Fees |
Client Membership Fees |
|
Connects |
Premium Job Posts |
|
Conversion Fees |
Conversion Fees |
|
Enterprise Subscription Fee |
|
|
Enterprise Billing Fee |
|
|
Enterprise Service Fee (Multiple) |
|
|
Remote Client Fee |
|
|
Talent Scout Client Fee |
User Interface
Invoice Display
When will Upwork start collecting VAT in Ukraine?
Tax collection will begin in early 2022. You will be notified first.
Why is Upwork collecting Ukrainian VAT?
We are collecting this tax to comply with local tax laws in Ukraine. A change in the law has required us to begin collecting these taxes unless you provide a Tax ID Number.
How much is this tax?
We are required to collect 20% of freelancer service fees, Connects purchases, and membership fees.
What if I’m only residing in Ukraine temporarily?
We are required to assess taxes on services provided by our company to anyone receiving such services in Ukraine. This applies even if you are a digital nomad and only temporarily residing in Ukraine.
Any time you move to a different country, even if temporarily, you should update your tax residency information on Upwork. For example, if you move to and work from South Africa, you may be subject to South African laws. If you then move to Ukraine, Ukrainian taxes will be assessed accordingly once you update your address. Please consult a tax professional if you have questions on how the taxes apply to you.
Do you share my tax information with the government?
We do not share any individual account details. We only report the total amount in taxes collected by Upwork.
For Clients
When are the taxes being implemented?
Tax collection will begin in early 2022. You will be notified first.
What if I don’t add my number before collection begins? Can I add it later?
You can add your VAT Number at any time. If VAT tax collection begins before you add your number and it is verified, we will be required to collect these taxes but will stop once your valid number is added and confirmed.
Please note that all VAT we collect is remitted directly to the government. We cannot refund taxes that we collected from you before your number was added and verified.
Why is Upwork collecting Ukrainian VAT?
There was a recent change in the law in Ukraine which requires VAT to be collected from certain individuals and businesses operating from Ukraine when they purchase electronic services from non-Ukrainian businesses (like Upwork). To comply with this law, we need to collect VAT on the services we provide to clients in Ukraine who do not have a VAT ID to exempt them from collection, and forward this tax to Ukrainian tax authorities.
How much is this tax?
We are required to collect 20% of payment processing fees, client membership fees, premium job posts, conversion fees, Enterprise subscription fees, Enterprise billing fees, Enterprise service fees, and Talent Scout client fees.
What if I’m only residing in Ukraine temporarily?
We are required to assess VAT on services provided by our company to anyone receiving such services in Ukraine. This applies even if you are a digital nomad and only temporarily residing in Ukraine.
Any time you move to a different country, even if temporarily, you should update your tax residency information on Upwork. For example, if you live in South Africa, you may be entirely subject to South African laws. If you then move to and work from Ukraine, you may be subject to this Ukrainian tax law, and should update your address on Upwork. Once you do, Ukrainian VAT will be assessed accordingly. Please consult a tax professional if you have questions as to whether and how the VAT applies to you and your business.
Do you share my tax information with the government?
We do not share any individual account details. We only report the total amount in taxes collected by Upwork.
I'm exempt from paying VAT in Ukraine. Are you still going to charge me?