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ProZ Pay™: A new way for freelancers to get paid
Thread poster: Mike Donlin

Mirko Mainardi  Identity Verified
Italy
Local time: 17:54
Member
English to Italian
Considering? Sep 25

Henry Dotterer wrote:

Mirko Mainardi wrote:
What about Transferwise then? It has already been mentioned by me and others in this thread, and if your goal is as per quote above, then, at the moment, that seems the best choice (for both conversion and transaction fees).


That is one of the companies we have (and will continue) considering for transactions where they offer the most competitive solution.


OK, so you are "considering" it, and that's great... but what about actually offering it as an option?

AFAIK, their conversion and transaction fees beat PayPal's (hands down...) and banks', and yet it's not offered for Italian recipients (didn't try with other countries...).


 

Mike Donlin
Local time: 11:54
SITE STAFF
TOPIC STARTER
Transferwise as option Sep 25

Mirko Mainardi wrote:

OK, so you are "considering" it, and that's great... but what about actually offering it as an option?

AFAIK, their conversion and transaction fees beat PayPal's (hands down...) and banks', and yet it's not offered for Italian recipients (didn't try with other countries...).


Hi Mirko,

We are working to offer it as an option. There should be more details soon.

Mike


Mirko Mainardi
 

Mirko Mainardi  Identity Verified
Italy
Local time: 17:54
Member
English to Italian
W-8BEN Sep 25

OK, so I tried to add my info for payment to actually see the details, as the landing page basically says nothing (as already mentioned before) and after selecting either PayPal or bank transfer, I'm asked to fill a "virtual" W-8BEN form, so, a couple questions about that:

1) Why? I mean, proz is not my client, and I've been working with both US clients and US payment service providers who didn't ask me to fill that (and still paid me - see 2).

2) If I declare that I am not a US citizen, not residing in the US, and that the services I provide are carried out of the US, why must I still enter a Tax ID number and "claim treaty benefits" to avoid the 30% withholding?

From the IRS guide to the W-8BEN form: "Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. sources that consists of: ... Compensation for, or in expectation of, services performed".

And, from the IRS FAQ: "4- Personal Services – If the services are performed in the U.S., the payment for those services is generally U.S. sourced."

In other words, since I'm not working in the US, the payment I receive is not "US sourced" and therefore not subject to withholding. Besides, last time I checked, you needed to provide a US TIN in order to claim exemption from withholding based on tax treaties (so, not your national SSN/tax ID, as mentioned in your form - see for instance here), but again, IMHO claiming those benefits only applies to foreigners with a TIN working from within the US.

[Edited at 2018-09-25 21:11 GMT]


Mohamed Gaafar
Jorge Payan
 

Mirko Mainardi  Identity Verified
Italy
Local time: 17:54
Member
English to Italian
Thanks Sep 25

Mike Donlin wrote:

Mirko Mainardi wrote:

OK, so you are "considering" it, and that's great... but what about actually offering it as an option?

AFAIK, their conversion and transaction fees beat PayPal's (hands down...) and banks', and yet it's not offered for Italian recipients (didn't try with other countries...).


Hi Mirko,

We are working to offer it as an option. There should be more details soon.


Thanks for the reply Mike.


 

Álvaro Espantaleón Moreno  Identity Verified
Spain
Local time: 17:54
Member (2015)
English to Spanish
Escrow option? Sep 26

I did try to use this with a client. The client didn't want to pay the full amount upfront. So we looked at escrow options. It seems this service is not included in ProZ Pay, is it?

 

Mike Donlin
Local time: 11:54
SITE STAFF
TOPIC STARTER
Who is showing on the bank account papers Sep 26

Ivana Kahle wrote:

Hello,
let's say I receive a payment via Proz Pay. Who will be stated as payer in the bank account papers which I have to hand over to my accountant? ProZ? My client? Someone else?
Can someone show an example, please?
It would be much appreciated.
Thanks!


Hi Ivana,

You will receive the money from ProZ.com on your bank statement.

Mike


 

Mike Donlin
Local time: 11:54
SITE STAFF
TOPIC STARTER
Escrow options Sep 26

Álvaro Espantaleón Moreno wrote:

I did try to use this with a client. The client didn't want to pay the full amount upfront. So we looked at escrow options. It seems this service is not included in ProZ Pay, is it?


Hi Álvaro,

Is your client a ProZ.com business member with a strong Blue Board? Escrow is something we may be able to investigate for them. It is not built into the platform yet, but we have had some inquiries about this and would like to help.

It would be interesting to hear how you and the client wanted the escrow to work, and what challenges it would solve. I presume you wanted to be assured of payment or did not want to wait 30-60 days for payment on the work.

I can contact you directly for details on your specific attempt.

Mike


 

Álvaro Espantaleón Moreno  Identity Verified
Spain
Local time: 17:54
Member (2015)
English to Spanish
Escrow Sep 26

They ended up paying upfront. What the client needs: to be able to recover its money if the work is not delivered/delivered too late or its quality is not acceptable. What the translator needs: a guarantee that he is going to be paid. What ProZ gets: a percentage of the escrow amount. Problems for ProZ: how to arbitrage disputes over quality or how late is too late.

 

Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 16:54
Member (2004)
English to Italian
Wouldn't work for me... Sep 26

Mike Donlin wrote:

You will receive the money from ProZ.com on your bank statement.

Mike



I have a business account and I need to show that the money is coming in from the clients that I have issued the invoices to... amounts must match clients and balances shown on the invoices... having all my income coming in as being paid by ProZ.com is not feasible for accounting reasons.


Tom in London
Ivana Kahle
Ivana UK
Fiona Grace Peterson
 

Mike Donlin
Local time: 11:54
SITE STAFF
TOPIC STARTER
Accounting for invoices Sep 26

Giovanni Guarnieri MITI, MIL wrote:

I have a business account and I need to show that the money is coming in from the clients that I have issued the invoices to... amounts must match clients and balances shown on the invoices... having all my income coming in as being paid by ProZ.com is not feasible for accounting reasons.


Hi Giovanni,

The incoming transaction would appear from ProZ.com as the sender. ProZ Pay would include a description on the invoice involved, amount and client to help match the transaction. (Just as Upwork and the like do.)

I will reach out directly and see if there is a way to meet your needs.

Mike


 

Mike Donlin
Local time: 11:54
SITE STAFF
TOPIC STARTER
W-8BEN form Sep 26

Mirko Mainardi wrote:

OK, so I tried to add my info for payment to actually see the details, as the landing page basically says nothing (as already mentioned before) and after selecting either PayPal or bank transfer, I'm asked to fill a "virtual" W-8BEN form, so, a couple questions about that:

1) Why? I mean, proz is not my client, and I've been working with both US clients and US payment service providers who didn't ask me to fill that (and still paid me - see 2).

2) If I declare that I am not a US citizen, not residing in the US, and that the services I provide are carried out of the US, why must I still enter a Tax ID number and "claim treaty benefits" to avoid the 30% withholding?

From the IRS guide to the W-8BEN form: "Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. sources that consists of: ... Compensation for, or in expectation of, services performed".

And, from the IRS FAQ: "4- Personal Services – If the services are performed in the U.S., the payment for those services is generally U.S. sourced."

In other words, since I'm not working in the US, the payment I receive is not "US sourced" and therefore not subject to withholding. Besides, last time I checked, you needed to provide a US TIN in order to claim exemption from withholding based on tax treaties (so, not your national SSN/tax ID, as mentioned in your form - see for instance here), but again, IMHO claiming those benefits only applies to foreigners with a TIN working from within the US.

[Edited at 2018-09-25 21:11 GMT]


Hi Mirko,

The form confirms you are not a US taxpayer. The tax information is requested in order to streamline this overall process.

I will take a closer look to see where you are encountering concerns. Many have filled it out, but we have gotten some feedback like yours where it appears more confusing than maybe it needs to be based on the circumstances you have described.

Mike


 

Mirko Mainardi  Identity Verified
Italy
Local time: 17:54
Member
English to Italian
Part II (tax treaty benefits) mandatory in your form Sep 26

Mike Donlin wrote:

Hi Mirko,

The form confirms you are not a US taxpayer. The tax information is requested in order to streamline this overall process.

I will take a closer look to see where you are encountering concerns. Many have filled it out, but we have gotten some feedback like yours where it appears more confusing than maybe it needs to be based on the circumstances you have described.


Hi Mike, thanks for your reply. Yes, I got that. It's used to tell the IRS that income is not subject to withholding. And as I was saying before, in my case it's not subject to withholding because it's not "US sourced" (as per IRS definition), and not because I'm claiming tax treaty benefits (Part II of the form), but the fact is that in your online form part II is mandatory and can't be skipped, and it says "To claim treaty benefits, please provide your US Tax Payer Identification Number and/or Foreign Tax Identification Number", and right after that there's a further section where you need to specify the article of the treaty for exemption for for Personal Services Performed in United States , except I've already "certified" I'm not working in the US...

In the past I did complete a couple of W-8BENs and only filled in Part I and Part III, leaving Part II blank, as it does not apply to my case and I was not claiming tax treaty benefits (also considering you need a US TIN to do that). I hope this makes my point more clear.


Thomas T. Frost
Jorge Payan
 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Indeed Sep 26

Mirko Mainardi wrote:

Mike Donlin wrote:

Hi Mirko,

The form confirms you are not a US taxpayer. The tax information is requested in order to streamline this overall process.

I will take a closer look to see where you are encountering concerns. Many have filled it out, but we have gotten some feedback like yours where it appears more confusing than maybe it needs to be based on the circumstances you have described.


Hi Mike, thanks for your reply. Yes, I got that. It's used to tell the IRS that income is not subject to withholding. And as I was saying before, in my case it's not subject to withholding because it's not "US sourced" (as per IRS definition),


Indeed. The IRS explain who should fill in a W-8BEN here:

https://www.irs.gov/instructions/iw8ben

"Who Must Provide Form W-8BEN
You must give Form W-8BEN to the withholding agent or payer if you are a nonresident alien who is the beneficial owner of an amount subject to withholding"

"Amounts subject to withholding. Generally, an amount subject to chapter 3 withholding is an amount from sources within the United States that is fixed or determinable annual or periodical (FDAP) income."

https://www.irs.gov/individuals/international-taxpayers/source-of-income-personal-service-income :

"All wages and any other compensation for services performed in the United States are generally considered to be from sources in the United States. The place, where the personal services are performed, generally determines the source of the personal service income, regardless of where the contract was made, or the place of payment, or the residence of the payer."

But most outsourcers (and Proz) don't understand it because it's so convoluted.

It’s often easier just to fill it in than discuss with people who don’t sit down and read the rules because they are so terrified of the IRS that they’d rather multiply the bureaucracy and nonsensical form-filling than understand what’s going on.

Anyway, the last time I looked at the explanations for this payment service, I concluded that it was so confusing and lacked so much clarity and information that I wouldn't touch it with a bargepole. The idea is good, but if the implementation, rules and fees aren’t crystal clear, how can the site expect anyone to use it?


Mirko Mainardi
 

Giovanni Guarnieri MITI, MIL  Identity Verified
United Kingdom
Local time: 16:54
Member (2004)
English to Italian
No need... Sep 27

Mike Donlin wrote:

I will reach out directly and see if there is a way to meet your needs.

Mike


It would still show that I am receiving money by Proz.com... the money needs to come directly from my clients, without intermediaries. All my clients pay me by bank transfer into my business account and I won't change this. Bank fees are deductible and I'm not bothered about saving £100/year, to be honest. It's a tiny fraction of my turnover and my accountant prefers it this way. So, I'm not changing my system.


Fiona Grace Peterson
 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 14:54
English to Portuguese
+ ...
That's the #1 issue Sep 27

Giovanni Guarnieri MITI, MIL wrote:

It would still show that I am receiving money by Proz.com... the money needs to come directly from my clients, without intermediaries. All my clients pay me by bank transfer into my business account and I won't change this. Bank fees are deductible and I'm not bothered about saving £100/year, to be honest. It's a tiny fraction of my turnover and my accountant prefers it this way. So, I'm not changing my system.


In Brazil (and possibly many other countries), banks require EVIDENCE to clear a bank transfer received to the payee. This may be an invoice, a PO, e-mail, etc. However two items MUST match: the PAYER, and the AMOUNT (they have some tolerance for MINOR variations, due to possible fees deducted on the way).

Banks need this to prove, in case they are investigated on money laundering, that they are not an accessory after the fact. IOW they received and filed bona fide documents that it was a legit and legal transaction.

This is possibly one of the reasons why PayPal set up their own operations in Brazil a few years ago. Now funds transfer (in a foreign currency) from PayPal to a Brazilian bank account are done via a DOMESTIC funds transfer in BRL (local currency), so if there is any international money laundering investigation, PayPal is liable, not the bank they use for that (domestic) transfer. For the record, such transfers of amounts exceeding BRL 10K (~USD 3K) cause an automatic electronic notification to BR tax authorities, just in case they are investigating any of the parties involved.

Payoneer also requires such "evidence" of a transaction. PayPal doesn't care so much, as they are devised for (and owned by) eBay, so the typical transaction they "envision" is like someone selling their vintage VHS VCR online.

Maybe a way out would be to provide enough space to write something to the effect of "Payer: Proz Pay ON BEHALF OF Acme Translations International Inc."


Loreta Saddi
 
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