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Legal problems with oDesk in European countries (invoicing requirements)

Sometimes, when project is finished on oDesk, some companies or freelancer, especially from countries like India, Russia or China, do not give me an invoice.

The German law (and also EU law for all countries in the European Union) requires an invoice before payments are made.

Furthermore, anonymous payments are illegal due to money-laundering regulation.

Therefore invoices are required that contain for example:

- the address and name or company name of the party who receives the money
- a tax id of the person or company to be able to identify the person/compnay who received the money.

I think oDesk should ensure it has a valid address and tax id from everyone who receives money in order to be on a legal path.

I also can not make a payment anymore to anyone who does not produce a valid invoice otherwise I could end up in prison!

If oDesk is based in the USA - you can compare this "crime" so something similiar with evading taxes in the USA.

Also a lot of people from Europe do not know this when using oDesk and could end-up having serious problems sooner or later.

p.s.: please also see my comment from last year:

https://www.odesk.com/community/node/27048

Vote Result

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Score: 9.9, Votes: 10
Same thing is valid for contractors

Hi, I think the same thing is true for contractors/freelancers outside US/Canada: they need to have clients details (tax ID, name, address etc.) to produce receipts and declare their income to their Governement and pay taxes.

I do not agree that payments are anonymous right now, though: they actually report "oDesk Corporation". And this is a complication: who do we receive money from / pay money to, officially? Documents report "oDesk Corporation", really. That's what's written and what happens in reality, the money flow goes that way. But - as non US/Canada residents - we cannot use oDesk for taxes declaration purposes. So we're really left in a "limbo".

This subject is extremely important, and I agree with Toby that oDesk should probably include - in the contract closing procedure - some fields to be filled with the tax IDs of both parties. This way these details would be included in the contract and will allow both parties to correctly fill out their respective taxes obligations.

How are you dealing with this?

I'm also curious about this for tax purposes. I began working with oDesk in 2012. Someone advised me that I should just submit invoices to the Finanzamt in Germany from oDesk Corporation, using the oDesk Corporation name, address, and tax number, rather than chasing up invoices from individual clients. Thoughts?

oDesk

Hi!
Your money go to/from oDesk corparation bank account, so your customers/contactors are hidden. From outside it looks like you have working relationships with oDesk only. Russian law requests contract with oDesk and invoices/actes of acceptance with sign me and oDesk. Act of acceptance is not a problem, oDesk support or delegate of oDesk financial departament give me it. It maybe, oDesk can give you invoice or another document with entered $, what you got or sent, and it will satisfy germanian law?

Although laws in Germany or

Although laws in Germany or the European Union in general are complicated sometimes - often they follow (originally) a logical reason.

Assume the following:

Someone has money from criminal activities and needs to "clean" it (=money laundering).

Using oDesk you could make payments to yourself by signing up twice as a contractor and a provider.

You could then invent some name and address somewhere and pretent you earned the money through work for a foreign employer / company.

Nobody will check it - as there is no control and no check of identities and addresses.

Another thing that becomes possible with oDesk is: not paying taxes.

Assuming you earn 100 USD and you need to pay 40 USD taxes.

You could create a fake project on oDesk with fake personalities and send an invoice to yourself over 100 USD - this way there is no income and you dont need to pay taxes -> in reality you paid it to yourself.

This is something that should be avoided. This is also in the interest of honest freelancers as some day there might be a huge tax inspection and everyone on oDesk will be checked.

The tax situation is a lot more complicated due to various tax situations in various countries.

E.g. in some countries oDesk would need to pay taxes to as they offer a service that is taxable as services are offered / forwarded across different country barriers.

invoices

Hello,

so how can I get a proper invoie from odesk (for my tax declaration as freelancer), thanks.

.

This became a problem in South Africa a few months ago. I posted about it and absolutely nobody responded. Either oDesk needs to come to the party about the tax requirements of the GLOBAL marketplace or stop operating as a global entity. Our clients cannot supply us with these details because oDesk is legally considered the client. A text doc with 'oDesk corporation' typed on it doesn't cut it. I could make that myself.

Everything I have read from

Everything I have read from oDesk insinuates that oDesk does not consider itself the client; it merely considers itself a third party payment processor, like PayPal.

I'm no expert on this, and

I'm no expert on this, and there are several other useful threads on it if you go searching. But I would presume you as the freelancer would not be getting an invoice from oDesk - you would be sending them one. There is a corporate address somewhere. In a normal job, when someone pays you for their service, they don't give you anything to prove they've paid you - you give them a receipt.

On the report page you can get a printoff of your earnings from oDesk in a given period - so send them an invoice for this and keep a copy for your taxman (if you want)

(I stand to be shot down on this, I'm just saying what seems common sense...)

.

Stephen, what you're saying makes absolute sense but the reserve bank in my country wants an official invoice from oDesk as proof that the money was legitimately earned. Other clients outside oDesk give me invoices with every payment with all the necessary details.

Kirsten - I'm not sure how

Kirsten - I'm not sure how you do it but try a search for other threads on the subject cos I know there's been quite a few - and it is of course different in different countries/areas