I am currently based in Portland, Oregon in the US. As a note, Oregon has no sales tax. I have a client in the Netherlands who pays for multiple Skype-based coaching sessions.
My client pays through Paypal; should I be charging taxes?
Freelancing Stack Exchange is a question and answer site for self-employed and freelance workers. It only takes a minute to sign up.Sign up to join this community
First I would strongly advise to get outide info from a professional on this. The end of the day, we all have knowledge and tips, but non of us (I assume) are freelance tax specialist.
I know different types of "products" have different kinds of rules. Coaching is a service. For services generally goes that you pay tax in the country where the work (the service) takes place.
So there is the "tricky" part. To my knowledge international law still has no consensus on how to deal with services that are executed remotely through the internet. The same goes for cybercrime. Because what country counts as the country the service is executed? So many different countries, so many laws, so many supervising instances...
So where do you pay tax? (I'm in software development, so basically the same thing. Delivering a service).
You're not in that country, so you're not physically doing your work there... Basically you have nothing to do with the receiving country. So you apply your own tax laws. I invoice with my countries tax and my client can ask taxes back from my country, since they in turn don't need to pay our taxes. There is a whole multi-billion industry build on just tax refunds. In your case that would be simple. Your country doesn't have tax, so you invoice with tax 0%. The big companies like Google do it too, that's why there is so much international criticism, they avoid taxes by having e.a. an office in Ireland and invoice from there.
Pay taxes where you live and are performing services.
You don't ever need to worry about taxes in a foreign country if there is no inventory or "hard goods" being sold or purchased. Ever.
I'm based in Oregon as well and have never, not once, been concerned with taxes because a client might happen to be in a foreign country. No foreign government can do anything to enforce their own tax structure on non-citizens, especially non-resident non-citizens. They may as well pick Americans at random and claim they owe taxes in their country. You only need to be concerned with US taxes. Your client has to be concerned about taxes where they live.
Note; Tariffs are another matter if inventory is being bought and sold internationally, but for web services or many digital services, there are no "hard goods" being transferred at any time.