posted this on September 11, 2012 09:36 AM
If you are a Freelancer in Europe, Australia or Canada and you are hired by a Client from these countries, you may be required to submit a Value Added Tax (VAT) to your government at the end of the tax year.
Elance enables Freelancers in countries listed here to add Value Added Tax (VAT) to their proposal amounts and, as a result, to the invoices they submit to their Clients. When adding VAT to invoices, Elance will provide Freelancers with invoice formats that are compliant with EU countries invoice requirements.
How does the VAT feature work on Elance?
To enable the VAT feature and allow you to start assessing VAT on proposals, log in to your Elance account and follow the steps below:
Click on your username in the top right corner of the Elance website and select the Settings link.
In the left navigation, click Billing & Payment.
Click on the Invoice & Tax Settings link.
Provide the tax / VAT ID then select the option to enable the VAT on invoices.
Select a Tax Label and enter any Tax Notes.
Click Save to enable the feature.
Here is an example of how a Freelancer will see VAT applied to their project costs:
Proposal amount submitted by Freelancer = $100
VAT Rate added by Freelancer = 10%
Elance Service Fee automatically applied by Elance = 8.75%