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if You pay 19% PIT then for the 100$ invoice it will be:ġ00$ revenue - 24,6$ expenses = 75,4$ gross profitħ5,4$ * 19% tax = 14,3$ income tax (this tax can be minimized by other expenses such as telephone bills, office rental etc.) You cannot claim any VAT back as You are not VAT registered.ĭepending on the company type, You also need to pay PIT (personal income tax) or CIT (Corporate Income Tax) from the net profits, rates vary depending on company type and status. This invoice can be wholly booked as company expense in Your accounting software. Upwork issues You an invoice for 20$ + 23% VAT = 24,6$. Client cannot claim any VAT back as there is no VAT on the invoice. In this case the cost to You client is 100$.Ģ. You do not need to report the VAT as there is no VAT on this invoice, and again, You are not VAT-registered. You invoice Your customer 100$, without VAT as You are not VAT-registered. You receive 75,4$ from Your client, the rest goes to Upwork (see below). OPTION2: You are a non-VAT-registered company (like DG or Sp.o.o. So for this deal, assuming You have no other expenses, Your net profit is 80$ - 18,7$ VAT - 11,65$ PIT = 49,65$

if You pay 19% PIT then for the 100$gross / 81,3net invoice it will be:Ĩ1,3$ net revenue - 20$ expenses = 61,3$ gross profitĦ1,3$ * 19% tax = 11,65$ income tax (this tax can be minimized by other expenses such as telephone bills, office rental etc.) You book the 20$ as company expense in Your accounting software.ĭepending on the company type, You also need to pay PIT (personal income tax) or CIT (Corporate Income Tax) from the net profits, rates vary depending on company type and status. Upwork charges You a 20$ fee and this is Your company expense, they issue You a VAT invoice but since You are VAT-registered, the invoice is without VAT as it comes from another EU country, but You still need to report the VAT to the tax office as reversely charged on the JPK (Google: import of services). The 2nd invoice is between You and Upwork. Obviously, then You need to transfer the 18,7$ VAT to the tax office at the end of month (in Poland it's VAT-7). The real cost for You customer is net amount (81,3$) as the client can claim the VAT back from the tax office, providing the customer is VAT-registered.Ģ. So You need to issue an invoice for 100$ gross (all invoicing software have this option of issuing gross invoices, in Poland "brutto"). But the money goes throught Upwork and it is a gross amount. You need to invoice the customer with VAT as it is required by law for VAT-registered entities. OPTION1: You are a VAT-registered company (like DG or Sp.o.o. You did a 100$ job for a client from Poland (assuming You are also in Poland): Łukasz, when You do a service through Upwork for someone there are 3 parties involved: You (freelancer), Your client/customer, and Upwork, and there are 2 "contracts", between You and Upwork, and another one between You and the client. I hate when people write answers without understanding the question, and with ZERO knowledge about the problem, like in this case.