Pages in topic:   < [1 2 3] >
Unilateral deductions from the due amount imposed by a client (translation agency) from Portugal
Thread poster: MariusV
Jennifer Forbes
Jennifer Forbes  Identity Verified
Local time: 14:37
French to English
+ ...
In memoriam
Unreasonable request Oct 16, 2010

I think we're going off the point in this thread. The key factor is not what tax legislation may or may not be in Portugal, the EU, etc., but that Marius is being asked to sign an agreement in a language he doesn't understand or to forfeit part of the sum due to him.
It cannot be reasonable to expect someone to sign what they cannot understand.
Marius should try to get this point across to the agency, not immediately to refuse to sign but to ask for a translation of the document he i
... See more
I think we're going off the point in this thread. The key factor is not what tax legislation may or may not be in Portugal, the EU, etc., but that Marius is being asked to sign an agreement in a language he doesn't understand or to forfeit part of the sum due to him.
It cannot be reasonable to expect someone to sign what they cannot understand.
Marius should try to get this point across to the agency, not immediately to refuse to sign but to ask for a translation of the document he is being expected to sign into a language he does understand. Then he can decide whether or not to sign it.

Best of luck to you, Marius.
Jenny
Collapse


 
Daniel Grau
Daniel Grau  Identity Verified
Argentina
Member (2008)
English to Spanish
Large American agencies enforce similar policies Oct 16, 2010

If you work for a large agency in the United States, they will automatically deduct income taxes from your invoice amount (i.e. they will pay them for you) unless you do one of two things:

1) If you reside in the U.S., you must send them a form (W-9) with your name, address, taxpayer ID, etc. They will use this information to report your payment to the Internal Revenue Service and then will pay you the full amount of your invoice.

2) If you don't reside in the U.S., you
... See more
If you work for a large agency in the United States, they will automatically deduct income taxes from your invoice amount (i.e. they will pay them for you) unless you do one of two things:

1) If you reside in the U.S., you must send them a form (W-9) with your name, address, taxpayer ID, etc. They will use this information to report your payment to the Internal Revenue Service and then will pay you the full amount of your invoice.

2) If you don't reside in the U.S., you must fill a form (W-8) with your name and address. Then, the agency will pay you the full amount and report the payment as made to a foreign beneficiary.

Both forms are in English, so if you don't speak the language, you're out of luck.

I suspect that what they asked you to fill was the equivalent of the W-8 form.

Regards,

Daniel
Collapse


 
MariusV
MariusV  Identity Verified
Lithuania
Local time: 16:37
English to Lithuanian
+ ...
TOPIC STARTER
yes, but... Oct 16, 2010

Daniel Grau wrote:

If you work for a large agency in the United States, they will automatically deduct income taxes from your invoice amount (i.e. they will pay them for you) unless you do one of two things:

1) If you reside in the U.S., you must send them a form (W-9) with your name, address, taxpayer ID, etc. They will use this information to report your payment to the Internal Revenue Service and then will pay you the full amount of your invoice.

2) If you don't reside in the U.S., you must fill a form (W-8) with your name and address. Then, the agency will pay you the full amount and report the payment as made to a foreign beneficiary.

Both forms are in English, so if you don't speak the language, you're out of luck.

I suspect that what they asked you to fill was the equivalent of the W-8 form.

Regards,

Daniel


Hi Daniel,

But would you agree with me that the client shall inform about all conditions (incl. formalities needed) during the negotiations for the job and its price. Not when there is time to pay?


 
2GT
2GT  Identity Verified
Italy
Local time: 15:37
English to Italian
+ ...
Withholding tax Oct 16, 2010

Krzysztof Kajetanowicz wrote:
It all depends on domestic legislation in Portugal. While domestic legislation is overriden by double tax treaties, which usually restrict the right of a "source country" like Portugal to withhold tax on the income of a foreign company, in order to apply the treaty you may need to present certain documents. Hence the PDF, probably. Again, it's just a guess but it does look like a typical withholding tax situation.


I agree.
I think it is simply a document you have to sign in which you state you are a foreign taxpayer, so they do not need to withhold local taxes.

That's why it should be better for you to sign.

But, have you eventually known what were the exact contents of that document?

Cheers
Gianni


 
Williamson
Williamson  Identity Verified
United Kingdom
Local time: 14:37
Flemish to English
+ ...
Simple-minded. Oct 16, 2010

Being simple-minded as I am, it smells a lot of an attempt to put those 21% in their own pockets.

 
Stanislav Pokorny
Stanislav Pokorny  Identity Verified
Czech Republic
Local time: 15:37
English to Czech
+ ...
VAT Oct 16, 2010

Hello Marius,
I bet your situation is the same as that of translators in the Czech Rep. Here, once you have provided your first service to a foreign client residing anywhere in the EU, you become automatically a VAT payer, regardless of your turnaround.

In that case, you will charge your Portugal client your rate + VAT, include a note in the invoice that VAT will be paid in Lithuania and that's it. No agreements to be signed, no nothing.


 
Nicole Schnell
Nicole Schnell  Identity Verified
United States
Local time: 07:37
English to German
+ ...
In memoriam
Sorry, Daniel, this is not correct. Oct 16, 2010

Daniel Grau wrote:

If you work for a large agency in the United States, they will automatically deduct income taxes from your invoice amount (i.e. they will pay them for you) unless you do one of two things:

1) If you reside in the U.S., you must send them a form (W-9) with your name, address, taxpayer ID, etc. They will use this information to report your payment to the Internal Revenue Service and then will pay you the full amount of your invoice.

2) If you don't reside in the U.S., you must fill a form (W-8) with your name and address. Then, the agency will pay you the full amount and report the payment as made to a foreign beneficiary.

Both forms are in English, so if you don't speak the language, you're out of luck.

I suspect that what they asked you to fill was the equivalent of the W-8 form.

Regards,

Daniel



A company will only deduct taxes from wages and salaries if you are an employee. Nobody is interested in paying your taxes if you are a freelancer. Most certainly not if you live in a different country.

This is a fairy tale.

Also: If you don't speak English, companies are allowed to send you translated versions.

Also: All they want is your address and your signature. We have never sent out any of those forms, even to translators in Argentina.


 
MariusV
MariusV  Identity Verified
Lithuania
Local time: 16:37
English to Lithuanian
+ ...
TOPIC STARTER
the deeper I go, the more I get confused Oct 16, 2010

Stanislav Pokorny wrote:

Hello Marius,
I bet your situation is the same as that of translators in the Czech Rep. Here, once you have provided your first service to a foreign client residing anywhere in the EU, you become automatically a VAT payer, regardless of your turnaround.

In that case, you will charge your Portugal client your rate + VAT, include a note in the invoice that VAT will be paid in Lithuania and that's it. No agreements to be signed, no nothing.


Dear Stanislav,

My free-lancer (self-employed) registration at tax renevue tells black on white that 1) I am not a VAT payer (I am not allowed to become such without reaching the required turnaround); 2) that my activities shall be carried out in the territory of my country; 3) it does not restrict to working for foreign clients. How is it possible that after providing services to a foreign client I (who is not a VAT payer nor allowed to be such) become a VAT payer??? All in all, there are country laws which might differ, BUT these MUST be (at least the basic principles) in compliance to the EU regulations...Based on this logical sequence, my country laws are in contradiction to EU laws and regulations which MUST be implemented into our national legislation???

Sorry, but I really got confused...


 
Charlie Bavington
Charlie Bavington  Identity Verified
Local time: 14:37
French to English
Not sure if this is relevant Oct 16, 2010

MariusV wrote:

2) that my activities shall be carried out in the territory of my country;

. How is it possible that after providing services to a foreign client I (who is not a VAT payer nor allowed to be such) become a VAT payer???

A couple of pieces of information that may or may not be relevant (do we know if this is a VAT issue yet?)

1. Since Jan 2010, the place of supply of translation services is, across the EU (as far as I know) defined as the client's country (this always was the case for the UK rules anyway). This is essentially why cross-border translation services are outside the scope of VAT.

2. If you do enough work for clients in another individual country, such that the value of your supplies reaches that country's VAT threshold, you might need to register for VAT in that country (that does depend on local rules).

This two points, plus perhaps a healthy dose of liberty taking and/or misunderstanding, could perhaps explain, if not justify, your client's proposed actions....


 
pascie
pascie  Identity Verified
Local time: 10:37
English to French
+ ...
Sorry Nicole, for once I have to disagree with you Oct 16, 2010

I have worked for a very big agency and was issued a W-2 (as an employee-on a free lance basis as part of a term-employee agreement) with all deductions applicable. This was reported to Social Security. This was before I became a US citizen. This was mandatory as per the end client's request with that agency, and per the latter's compliance to same end client's provisions.
Of course, this was within the scope of a very large contract ($$$$$$), which is still effective as of today.
Ne
... See more
I have worked for a very big agency and was issued a W-2 (as an employee-on a free lance basis as part of a term-employee agreement) with all deductions applicable. This was reported to Social Security. This was before I became a US citizen. This was mandatory as per the end client's request with that agency, and per the latter's compliance to same end client's provisions.
Of course, this was within the scope of a very large contract ($$$$$$), which is still effective as of today.
Nevertheless, the main reason why agencies do not offer this is because it's less paperwork for them and time spent.
Sorry but I had to make this informative statement.
Have a nice weekend.
P.


Nicole Schnell wrote:

Daniel Grau wrote:

If you work for a large agency in the United States, they will automatically deduct income taxes from your invoice amount (i.e. they will pay them for you) unless you do one of two things:

1) If you reside in the U.S., you must send them a form (W-9) with your name, address, taxpayer ID, etc. They will use this information to report your payment to the Internal Revenue Service and then will pay you the full amount of your invoice.

2) If you don't reside in the U.S., you must fill a form (W-8) with your name and address. Then, the agency will pay you the full amount and report the payment as made to a foreign beneficiary.

Both forms are in English, so if you don't speak the language, you're out of luck.

I suspect that what they asked you to fill was the equivalent of the W-8 form.

Regards,

Daniel



A company will only deduct taxes from wages and salaries if you are an employee. Nobody is interested in paying your taxes if you are a freelancer. Most certainly not if you live in a different country.

This is a fairy tale.

Also: If you don't speak English, companies are allowed to send you translated versions.

Also: All they want is your address and your signature. We have never sent out any of those forms, even to translators in Argentina.
Collapse


 
Nicole Schnell
Nicole Schnell  Identity Verified
United States
Local time: 07:37
English to German
+ ...
In memoriam
Ah! Then you were indeed an employee. Temporarily. Oct 16, 2010

pascie wrote:


I have worked for a very big agency and was issued a W-2 (as an employee-on a free lance basis as part of a term-employee agreement) with all deductions applicable. This was reported to Social Security. This was before I became a US citizen. This was mandatory as per the end client's request with that agency, and per the latter's compliance to same end client's provisions.
Of course, this was within the scope of a very large contract ($$$$$$), which is still effective as of today.
Nevertheless, the main reason why agencies do not offer this is because it's less paperwork for them and time spent.
Sorry but I had to make this informative statement.
Have a nice weekend.
P.



That's a different story - you were an employee during the course of this particular project because you agreed to do so in your contract.


 
MariusV
MariusV  Identity Verified
Lithuania
Local time: 16:37
English to Lithuanian
+ ...
TOPIC STARTER
a piece for the puzzle Oct 16, 2010

Can it be that:

Say there is a company in Portugal and it cooperates with service prividers who have the following status:

a) direct employees from Portugal (employer-employee contract) for whom the company shall pay taxes from the paid salary (i.e. social security, income tax, etc.);
b) "free-lancer" service providers from Portugal (both citizens of Portugal and foreigners "freelancing" in Portugal) where the company shall also pay certain taxes from the "contrac
... See more
Can it be that:

Say there is a company in Portugal and it cooperates with service prividers who have the following status:

a) direct employees from Portugal (employer-employee contract) for whom the company shall pay taxes from the paid salary (i.e. social security, income tax, etc.);
b) "free-lancer" service providers from Portugal (both citizens of Portugal and foreigners "freelancing" in Portugal) where the company shall also pay certain taxes from the "contract amounts"?
c) "free-lancer" service providers NOT from Portugal ("foreigners working in their own countries") - for which the company from Portugal should also pay certain taxes from the "contract amounts", BUT IF they (freelancers) sign certain forms (bilateral taxation treaties between countries) of "fiscal residence", then it means that the company from Portugal pays "0" on the basis of these signed forms which they show to their tax revenue, and the "foreigner freelancer" pays what is due in his/her country? and if they do not have this form, they must pay their taxes as under point "b"?

Then they do not tell anything about these forms and formalities BEFORE sending the job (as no one would be very much willing to take it as doing the formalities actually takes more time and effort than the job itself), and when it comes to payment, their accountant "remembers" that the service provider must fill in and sign these forms, and when the service provider asks "Guys, what these formalities all about? You never told about these before the job", they give an ultimatum "either you sign and you get your money in full, or you do not sign - up to you - and we deduct 21.5% taxes from the due amount to you"? So the company went the "easiest way" - they'd deduct from the amount due instead of paying their taxes from the amount due...???

P.S. I think that VAT has nothing to do here as it is quite a different issue as these forms, as far as I could translate them from Portuguese using google, deal with "revenues received in Portugal".

[Edited at 2010-10-16 17:23 GMT]
Collapse


 
Inga Petkelyte
Inga Petkelyte  Identity Verified
Portugal
Local time: 14:37
Lithuanian to Portuguese
+ ...
The same requirement everywhere Oct 16, 2010

I guess that is just a form to prove the fiscal residency outside the Portuguese national territory. The same requirement is applicable in Lithuania - an individual has t prove they pay taxes elswhere, otherwise the deduction is made.

ok, maybe not every-everywhere but this is a very common practice. Daniel has rightly pinted out the W-8.

Marius, if you want, let me see what is the form; I bet there is nothing extraordinary.


 
Stanislav Pokorny
Stanislav Pokorny  Identity Verified
Czech Republic
Local time: 15:37
English to Czech
+ ...
Reply Oct 16, 2010

Hello Marius,
here go my replies:

MariusV wrote:

Dear Stanislav,

My free-lancer (self-employed) registration at tax renevue tells black on white that 1) I am not a VAT payer (I am not allowed to become such without reaching the required turnaround);

Irrelevant. Once you have rendered a service to a foreign client, you have to become a VAT payer, regardless of your turnaround.

2) that my activities shall be carried out in the territory of my country;

Irrelevant.

3) it does not restrict to working for foreign clients.

There is no restriction on this indeed. However, see my reply to your point 1.

How is it possible that after providing services to a foreign client I (who is not a VAT payer nor allowed to be such) become a VAT payer???

Ask our beloved Members of the European Parliament and the European Commission.

All in all, there are country laws which might differ, BUT these MUST be (at least the basic principles) in compliance to the EU regulations...

In fact, this IS an EU regulation. In force since January 2010.

Based on this logical sequence, my country laws are in contradiction to EU laws and regulations which MUST be implemented into our national legislation??? Sorry, but I really got confused...

Your country may have not implemented this legislation yet, but I believe it already has. The best way to avoid confusion is asking your local tax authority just as I did.

[Upraveno: 2010-10-16 18:54 GMT]


 
MariusV
MariusV  Identity Verified
Lithuania
Local time: 16:37
English to Lithuanian
+ ...
TOPIC STARTER
:) Oct 16, 2010

Inga Petkelyte wrote:

I guess that is just a form to prove the fiscal residency outside the Portuguese national territory. The same requirement is applicable in Lithuania - an individual has t prove they pay taxes elswhere, otherwise the deduction is made.

ok, maybe not every-everywhere but this is a very common practice. Daniel has rightly pinted out the W-8.

Marius, if you want, let me see what is the form; I bet there is nothing extraordinary.


Inga, do you understand Portuguese? That would be great.


 
Pages in topic:   < [1 2 3] >


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Unilateral deductions from the due amount imposed by a client (translation agency) from Portugal







Trados Business Manager Lite
Create customer quotes and invoices from within Trados Studio

Trados Business Manager Lite helps to simplify and speed up some of the daily tasks, such as invoicing and reporting, associated with running your freelance translation business.

More info »
Wordfast Pro
Translation Memory Software for Any Platform

Exclusive discount for ProZ.com users! Save over 13% when purchasing Wordfast Pro through ProZ.com. Wordfast is the world's #1 provider of platform-independent Translation Memory software. Consistently ranked the most user-friendly and highest value

Buy now! »