Upwork Global Inc Commiting Tax Fraud and Charging 25% Fees Instead of Stated 20% Mountain View California

Upwork Global Inc. with it's website Upwork.com provides an online service, which brings together Freelancers and agencies and clients who are offering jobs.

After increasing their fees, Upwork in their terms and conditions currently claims to charge 20% fees from freelancers. But since they are charging 20% of the amount the client is paying, which already contains the fees, the actual fees they charge are 25%.

According to the calculation in the proposals on the Upwork website, between the amount a freelancer gets and the amount the client pays should be the fees or according to Upwork 20%. It has been proven to Upwork, that between the two amounts are 25%, not 20%.

Upwork is offering international services. For the European Union it is mandatory for the offerer to reveal all fees and taxes to contract parties before a contract is confirmed. Also, it can be considered best practice and reasonable for proposals and contracts. The tax statements are missing in various Upwork offers and according pages. Also, VAT is charged to the freelancer, not the client.

Furthermore, Upwork provides 3 different payment statements. The proposal, the offer contract and the actual payment. For example, the proposal states 20% fees but calculates 25%. The offer contract then states 11.43% fees, while in the payment a total of 31.58% fees are deducted. Constant in all 3 cases is the amount the client pays.

Upwork has been informed about this and while there is proof of them admitting, the fee statement in the offer contract is a known issue, a month after opening the tickets, the only changes are, that the according support ticket has been closed several times (daily), the account of the reporting member has been "temporarily supsended" and the member has been locked out of the support platform for reopening tickets the support didn't reply to.

Also, Upwork is commiting tax fraud. They do it by twisting the transaction history of the freelancers account. For the same reason, the freelancer is charged with 25% fees instead of 20%.

The client offers the job. The freelancers sends an application along with a proposal. The proposal showing what the freelancer gets, the Upwork fees and the total amount the client is paying. The freelancer does the job. The client pays to Upwork. Upwork deducts the fees and taxes and after a 5 days security period adds the rest to the account of the freelancer.

The transaction history states something entirely different. Upwork treats everybody as a client. An easy way to find proof for this statement, is to compare membership payments with receiving job payments. While in reality the freelancer pays membership fees but receives a client payment for a job, Upwork treats both the same way. In both cases the freelancer is charged VAT. Also the support claims, the freelancer is a client. This way they charge more fees from the freelancer, while saving taxes.

The transaction history in the account of the freelancer says, the freelancer first gets the payment from the client. In a second transaction, the freelancer pays the fees to Upwork. This way Upwork can charge 20% of the amount the client is paying, instead of 20% of the amount the freelancer requested and gets. Also, since according to the books the freelancer is now paying the Upwork fees, Upwork charges the VAT to the freelancer and only for the Upwork fees instead of charging VAT for the full payment amount to the client.

While in real life only 2 transactions happen and only one that includes the account of the freelancer, the transaction history of the freelancer's account shows 3 transactions for 1 contract. Proof actually disappears after 5 days, when the money is added to the freelancer's account. Because there is proof in the "Pending" amount.

After the confirmation of the client, the freelancer's account for 5 days shows one pending amount in the according section and no according transaction of the same amount, but on the other hand the same section shows 3 different transactions, none of which showing the transfer of the actual pending amount.

Due to this tampering with the transaction history, not only do they charge more fees to the freelancer. Also, since they receive the first real payment from the client, they should charge VAT to the client and pay it to the IRS where the client is located in. For the full amount the client is paying. But since they twist the transaction history, they charge the wrong VAT, to the wrong person and pay it to the wrong IRS, plus claim, the freelancer now has to pay the VAT for the full payment amount to the client's IRS.

This has been reported to the support. The primiary reply of the support are general statements and references to the terms and conditions, along with repeating descriptions of what they do. But after a month of discussions, no actual action has been taken and no problem has been solved.

Full proof, along with how the support is handling according reports and the resulting account suspension can be found on upworkfraud.byethost4.com, where an according case has been described in detail, and proof in form of screenshots has been provided.