Deduction on fees and freelancers
Thread poster: Mohammad Ghaffari
Recently, a client (which seems to be a colleague working in my language pair at Sweden) has contacted me for a project. I told him that I charge the standard rate, but he insists that there is a "deduction of fees" that I as a translator should pay it. When I told him that "translation rate is the money a translator receives for each word s/he translates, and deduction of fees or any other charges are not related to her/him in any case at all", he replied me that "I don't know which country you live in. But here in Sweden 58% of the money a translator receives goes to paying fees. Keep in mind that Sweden is one of the world's most developed country."
I have not worked with Sweden clients so far, and I do doubt in his words. But I was wondering if he is right or not.
| Fees or taxes? Everybody pays its own || Nov 25, 2016 |
I don't know what your client-colleague means by those fees, I would guess he means “taxes” and/or “expenses”. Anyway, the only two things you have to bother in this respect are (1) to make sure and clear right at the beginning the exact amount you will receive for this project (2) issue the corresponding, legally valid bill and send it to the client.
Here in Spain, when I have to subcontract proofreading of my own translation (this is the only thing I subcontract to another colleague), the proofreader has to issue a bill which includes legally foreseen taxes (part of which I have to pay in her name to the tax authorities). But then again, this is not her problem, my obligations are my problem, the proofreaders problem is to receive the project from me, execute it for the agreed rate and send me the corresponding invoice. Full stop. That is it. The rest is my problem, I have to pay the proofreader and comply with obligatory tax payments. I think your case is the same, but for sure there are other legislations with respect to VAT, etc. These you have to find out from your accountant and apply taxes correctly on the invoice issued for Sweden.
Maybe you could ask the client what fees he/she is talking about? Here in Spain about 30% of your income goes to taxes/expenses etc., but in Sweden this should be a higher figure, I figure... Anyhow, it is not your problem. You simply have to agree on a rate and issue a correct invoice (making somehow sure, this is really important if you work for a client who is far from you geographically, that you will be paid by the agreed terms).
My advice would be to clarify everything exactly before starting to work.
Best regards from Spain,
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| | Mohammad Ghaffari
Local time: 18:41
English to Farsi (Persian)
| Thanks and more || Nov 25, 2016 |
Thank you for your prompt reply to my question. I guess sharing the rates can help in this case. He suggested a 0.04 USD per source word rate, I told him that his suggestion is below the average and the normal rate is 0.10 EUR, and told him that the least I can charge is 0.08 EUR.
I also contacted a colleague who has worded with Sweden clients before, and he told me that his Swedish clients usually pay him 0.12 EUR per source word.
In Iran, my country, the government does not charge any taxes on the income of freelancers, because he does not provide them the services it provides for employees, and I have always received the very amount of money I have asked for any project from any client and agency residing at the US, Brazil, and Iran.
| Unauthorized subcontracting? || Nov 25, 2016 |
Is it possible that this "client" is trying to subcontract this work to you "in the gray", meaning that he charges his full fee to his client, declares that as his income and therefore he has to pay 58% taxes, etc. on it, and wants to pay you the 0.04 EUR without documentation, and keep a few cents profit as his own?
(Let's say he charges 0.15 to his client, after 58% deduction he would get 0.063, pays 0.04 to you, keeping 0.023 to himself.)
Because if he subcontracts the work to you legally, then you send him an invoice, which he accounts for as an expense, and he only has to pay the 58% on his own income, which is the difference.
Make sure that whatever he is doing is legal, or at least that you wold not get into trouble for taking a job from him.
Also make sure that he understands that you are outside of the EU and therefore VAT does not apply to you.
[Edited at 2016-11-25 21:11 GMT]
| | Samuel Murray
Local time: 16:11
English to Afrikaans
| 58% is Sweden's high-end income tax rate || Nov 26, 2016 |
Mohammad Ghaffari wrote:
He insists that there is a "deduction of fees" that I as a translator should pay. ... [He says,] "Here in Sweden, 58% of the money a translator receives goes to paying fees."
Well, Sweden's income tax on the highest bracket is roughly 58%, so perhaps he's referring to income tax. Even if he does, though, no-one actually pays 58% (they only pay 58% on the income that exceeds the first three lower income brackets).
People who receive income, must pay income tax on their income. You're not an employee of this colleague of yours, and I would presume that he is not responsible for paying your income tax on your behalf.
If people are employees, then it may be possible that their employers pay their taxes on their behalf (i.e. by deducting it from their salaries). However, for non-employees (e.g. freelance translators), clients usually do not pay the income tax on behalf of the translators (but: I'm not sure if poor sods in Sweden who make use of freelancers must pay the freelancers' income tax on their behalf).
There may be special rules in Sweden with regard to buying services from outside Sweden, or special rules that apply to embargoed countries (I'm not sure if Iran is embargoed in Sweden), or special rules with regard to countries that do not charge income tax, but in all such cases, I think that the client (i.e. your colleague) should pay for it. You have your rate and the client has to pay it, and if the client is liable for other fees with his own government, then those fees are business expenses for his account, not yours.
[Edited at 2016-11-26 09:03 GMT]
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| | EvaVer
Local time: 16:11
Czech to English
| Fixed-rate expenses? || Nov 26, 2016 |
Maybe the person deducts fixed-rate expenses for tax purposes, and therefore he/she cannot deduct the cost of subcontracting and will pay taxes and social charges thereon. This is their problem, though. So do I, I also only subcontract proofreading and pay my proofreaders regardless, these amounts are not substantial compared to my overal earnings. Sometimes, between friends, there is some "unofficial" subcontracting that is done at "minus taxes" prices, but in this case, the translator does not declare the revenue - it is declared and all taxes paid by the outsourcer. This is only possible within one country, though, and the payment cannot be done by traceable means (like wire transfer). If somebody intends to subcontract on a regular basis, they should change their tax regime or bear the consequences.
| White, grey and black || Nov 26, 2016 |
as Katalin and Eva says, the possibility of grey exists, but it is really not adviseable. Things should be clear, and clear means black or white. Only as a side-note.
Have a nice week-end, we have a powwow here today, with very few attendants, fewer as usual...
[Edited at 2016-11-26 10:20 GMT]
| That Swede’s “fees” are not your problem. || Nov 26, 2016 |
I think the Swedish tax system is similar to the system here in Denmark where freelancers pay a percentage of their profit (basically income minus expenses) in taxes. He would deduct your pay from his income, so I would say that he is either trying to trick you, or he knows nothing about bookkeeping or the tax system.
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Deduction on fees and freelancers
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