I am verified on Upwork, living in Europe. I am not from the U.S. Taxes?

McTron

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Hi there!

I am verified on Upwork and about to start a bullet-proof plan to make a good amount of money through it while getting great reviews and stuff. Just moving my very loyal clients to Upwork, nothing fancy or even remotely illegal. In fact, Upwork likes this.

My question is direct and simple: What do you think is the real risk (high, medium, low, feel free to get specific) of not reporting my Upwork earnings? I live in the EU.

Why I ask this question:

1 - I have filled out this W-8BEN (literally 3 lines) form which basically says that Upwork doesn't give a sh*t about my taxes if I am not a U.S. citizen (which I am truly not). It states that Upwork won't take any actions whatsoever regarding my taxes in my country and that I am fully responsible for my tax reports.

2 - My name will appear on the invoices that my clients get, which they will very probably save. No invoice addresses or even VAT number will appear though, just a common name under "freelancer".

3 - In Germany, (where my clients are from) it is not mandatory to show invoices in your tax declaration. You just give 'em numbers. It is only necessary when the tax authorities think something is off with the person (my client, not me) and they ask for proof of business costs. So, my clients will keep those invoices with my name on them, but they will very probably never have to show them.

4 - My clients are all in Germany but I am not registered in Germany whatsoever (anymore). I live in Spain. I respond to the Spanish tax authorities, but my clients only report to the German ones. So, even if they do show the invoices with my name (and nothing else) on them, I don't see how the Spanish authorities are going to know about this. For what the German authorities know, this "freelancer" from Upwork could be living in freaking Australia (I got quite the English/international name).

I am not saying I will do whatever it takes to avoid reporting Upwork earnings. Not at all. I am just asking for the opinions of those who think they can contribute to my question. If the risk does seem high, I won't risk it and report every penny I earn on Upwork.

Thanks in advance for whatever contribution you can make! Any kind of answer is welcome!

Cheers,
McTron
 

AMPServices

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You should worry about how you are going to justify your earnings to Banks and other authorities. You can refrain from declaring your earnings but how are you going to get paid? You need some kind of not on your name currency you can use. I would open a business and pay taxes for at least part of the earnings to stay safe.
 

McTron

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You should worry about how you are going to justify your earnings to Banks and other authorities. You can refrain from declaring your earnings but how are you going to get paid? You need some kind of not on your name currency you can use. I would open a business and pay taxes for at least part of the earnings to stay safe.

Trust me, when it comes to EU countries, only paying taxes for "part of the earnings" is just as bad as not paying anything. Especially in Germany, they are ridiculously strict (this coming from a half-German).

Justifying my earnings to my Bank? Do banks even care where the money comes from as long as it is not ridiculous amounts of money? I wouldn't be making a great deal of bling-bling. After all, I had been getting quite the amounts from study loans, parents, etc. and never got asked. And the bank receipts didn't give away that the money was coming from study loans or my parents...

I guess I'll research what kind of other "authorities" would want to ask me where I got the money from. Thanks!
 
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