Taxes clause for freelancers
A taxes clause stating that fees exclude VAT or sales tax, and that the client covers any tax added on top or withheld.
Taxes clause: copy and adapt
All fees are exclusive of VAT, sales tax and similar taxes, which will be added to invoices where applicable. If the Client is required by law to withhold any tax from a payment, it will increase the payment so that the Provider receives the amount it would have received without the withholding, unless the Provider can recover it as a tax credit.
When to use it
Whenever tax could apply: VAT-registered freelancers, cross-border work, clients in countries with withholding tax.
Variants by trade
Not VAT registered
The Provider is not registered for VAT; no VAT is charged on invoices under this agreement.
EU cross-border
Services are supplied to a business in another EU member state; VAT is accounted for by the Client under the reverse charge mechanism. The Client's VAT number is [number].
Frequently asked questions
Should my rates include or exclude VAT?
When working with businesses, quote excluding VAT and say so. It avoids arguing later over whether tax was already in the price.
What is withholding tax?
Some countries require the client to keep part of a cross-border payment for the tax authority. Without this clause, that comes out of your fee.
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These clauses are general templates, not legal advice. Laws vary by country and state; for high-value or unusual deals, have a lawyer review your contract.
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