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Upwork wants to charge VAT to EU freelancers...can I...just change my country to a non EU?

Discussion in 'Business & Tax Advice' started by asker1, Oct 29, 2015.

  1. asker1

    asker1 Junior Member

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    Hi,

    so I received an email from Upwork that they will charge VAT to freelancers from the EU. Which means basically another 15-25% (depending on country) rise to the upwork fee if you dont have a VAT number. This is a blackhat forum so I will ask a blackhat thing... can I just change my country to some random country outside EU and dont worry about paying any VAT? Is there any disadvantage to this? If there would be problems from Upwork, then lets just say that i work from abroad... :D.

    I just tested it and I can change my country with one click, no problem.

    Thoughts?
     
  2. asker1

    asker1 Junior Member

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    Bump......someone?
     
  3. infoasian

    infoasian Supreme Member

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    If it works .... don't understand why you can't provide a VAT number. Just apply at your revenue service, it's free.
     
  4. asker1

    asker1 Junior Member

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    It doesnt work that way at least not here. If you want a tax number here, then you have to be registered as a freelancer at the tax office and pay monthly taxes etc. . I want to avoid that, because i have another job right now. You simply cannot have a VAT number without having a company or being a registered freelancer...
     
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  5. melimeli

    melimeli Newbie

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    Yes you are right. Then again how can we all Upworkers "move" to Lichtenstein suddenly? Isn't there an IP check or smth like that? I am very interested in this topic because I am not willing to give up almost 25% to a government which doesn't give me anything in return. Even if it wanted couldn't give me anything in return for that tax , because I do not have a VAT ID. Setting up taxpaying freelancer in the country I live is not cost effective at all, I would end up working for them, and me earning close to nothing. I will contact all my clients and asking them for a greater hourly payment explaining that it is not my or their fault for this decision upwork made. If that will not work I am thinking about moving to Freelancer, PPH or even GURU. Upwork should consider that it will loose freelancers and clients from countries with high VAT, and countries with high VAT(as compared with the average income), are also countries with east european language speaking freelancers. Upwork is going down.
     
  6. melimeli

    melimeli Newbie

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    I read once again the Upwork mail , the VAT is added to the Upwork 10% service fee... ? Did I finnally get that right? Anyway it still very bothering.
     
    Last edited: Oct 29, 2015
  7. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    If you can switch it, do it... don't see any problems. Only if they go an report you it may be a problem. Otherwise, form a simple offshore corp outside of Europe and you should get rid of the VAT!
     
  8. HoNeYBiRD

    HoNeYBiRD Jr. VIP Jr. VIP

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    the buyers pay the VAT, not the providers, at least that's how it usually works
    if the buyers will be bothered, they can change the country (if there's an option for that and they are smart enough), i wouldn't think that upwork would bother much, they won't get a single cent from the VAT
     
  9. asker1

    asker1 Junior Member

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    I think VAT will be paid from the upwork fee. So for example if your countries VAT is 19%, then you will pay the 10% Upwork fee and you can add the 19% to it, so in the end, you will end up paying 11,9% in fees. But why bother? I cant get that VAT back from my government and I wont register as a company, its really expensive, many monthly payments, taxes etc.

    I just changed my country to a non EU in Upwork and its gone, I dont see the VAT number column in my settings anymore.
     
  10. insiderx

    insiderx Newbie

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    Would an European location with VAT 0% be OK, like Gibraltar or Canaries - or do we have to try Greenland?
     
  11. Kn9Isler

    Kn9Isler Regular Member

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    They track your IP. If you change your location and will sign in with an IP from a different country many times, you will get an email with request to update your residence info.
     
  12. asker1

    asker1 Junior Member

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    Sorry but I dont believe that. Show me an email you received from upwork that requests you to update your residence info.
     
    Last edited: Nov 6, 2015
  13. pseudonym

    pseudonym Regular Member

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    what you're asking here is what i've done at various websites that suddenly began charging VAT on things. simply changed country to argentine - no more VAT screen. alternatively, but this is a bit more illegal, you could dig into your country's companies register and copy paste the VAT# of a company large enough to never notice your 20-50k eur a year... i can vouch that this second approach works even at pretty large and sensitive online services

    with method two... what happens in the backend is at the end the year, upwork will file taxes in jurisdiction X, where they then mention Y% deferred tax to TAX# Z, resident in XX. in 80% of all cases this is where things end. a small subset of situations may prompt jurisdiction X to doublecheck tax paid by TAX# Z with jurisdiction XX's irs, who will then report no such payment took place and then notifying TAX# Z about the discrepancy. a company filing over 2m eur a year however, will simply never trigger any of this

    there is actually also a third method, which would involve you submitting proof of non-domicile in an jurisdiction X (say germany) and proof of address in an jurisdiction Y (say argentine) -- the service provider would then no longer have the right to charge you VAT while you would be able to maintain address and IP of jurisdiction X. in reality however, the extra accounting this brings up costs companies more than they earn off your freelance revenue and they will thus refuse to cooperate on this special exception. but if they are willing to--- you could also go this route (and of course, simply buy those verification documents off people providing them as a part of paypal unlocking services...)
     
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    Last edited: Nov 6, 2015
  14. HoNeYBiRD

    HoNeYBiRD Jr. VIP Jr. VIP

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    so what? just rent a private proxy from outside EU so that you can use it with upwork with no VAT id asked anymore, it would cost like $1/month
     
  15. Kn9Isler

    Kn9Isler Regular Member

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    you have to take it on trust

    it was just a heads up if you plan to change your location

    Cheers
     
  16. Morza

    Morza Newbie

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    I suggest that you move to the next non EU country, like Serbia, Norway, Russia etc.
     
  17. LocalProxies

    LocalProxies Jr. VIP Jr. VIP

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    I don't get is this only for the members of the European union or all the countries in Europe. If it is just for European union countries come to Macedonia, or just change it to Macedonia. I work on upwork as well but i haven't received a mail like that. So it must be just for European union countries.
     
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  18. Bleght

    Bleght BANNED BANNED

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    Many freelancers travel all over the world and work from all kinds of locations, so I don't think they are going to bother too much with policing location. They are just required by law try and charge the VAT, but if you use the little "change-your-country" cheat, they will most probably not try and stop you. It will be a pain for them to try and verify your location, but as mentioned above they have nothing to gain from it. So it's easier for them to let you change your country and if there is a problem with authorities (which is very unlikely), you will be the one that provided false information and they will not be facing any consequences. I've changed my country on many websites to avoid VAT and it usually works, nobody bothers to police that, because they don't have an incentive to do so.
     
  19. bourrinfurtif

    bourrinfurtif Junior Member

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    Sometimes I forget that I'm on BlackHatWorld, but this kind of stuff brings me back to reality :D Thanks for the ideas!!