What is VAT?
Value Added Tax is abbreviated as VAT. Taxes are imposed on goods and services when they are sold. Most goods and services that are bought and sold for use in the European Union are covered by this regulation.
The final consumer ultimately bears the cost of the consumption tax.
Who has to pay VAT?
Normally, the supplier who sells goods or services is responsible for billing and collecting the VAT from the customer. After the VAT has been collected, the supplier informs the tax authorities and remits the collected VAT to them.
You should enter your VAT Identification Number to Zoom if you are a business customer (for more information about putting in your VAT ID, see ‘How do I enter my VAT ID?’ below). If your VAT number is valid, Zoom will not charge you VAT, and you will be provided with free goods or services. In the event that you do not have a VAT number, Zoom will charge VAT on any supplies made to you by us.
Note that in order for your VAT number to be considered valid, it must be registered as part of the VIES database. Zoom will be using VIES (an official database used by the European Commission to validate the validity of VAT numbers issued by EU member states) as a means of validating VAT numbers supplied through the Zoom billing portal. The inclusion of a VAT number in the VIES database is not automatic in some EU Member States. In this case, you may have to apply to your local tax authority for your VAT number to be included on the VIES database.
Where does EU VAT apply?
There are a number of EU member states that are subject to EU VAT. There are currently 28 countries that are members of the European Union. These have been arranged in the following order: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France (including Monaco as of VAT purposes), Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the European Economic Area.
Please be aware that other European countries that are not members of the European Union may have their own VAT system.
Please refer to the FAQs for other countries for further information.
What is the EU’s relationship with Norway and Switzerland?
Norway and Switzerland do not belong to the EU. You can find more information about these countries in the FAQs.
What is a VAT ID number?
VAT identification numbers or VAT registration numbers are unique identifiers of businesses that are registered for VAT. Customers with a valid VAT number (as displayed in the VIES database) will not be charged VAT.
Does Zoom have a VAT ID number?
In each of the EU’s member states, Zoom does not have a VAT registration. Zoom instead registers for VAT with the non-Union Mini One Stop Shop (‘MOSS’) in the EU.
It simplifies the collection and remittance of VAT on the supplies of telecommunications and/or electronically supplied services made to non-business customers in EU Member States by taxable persons not established in the EU.
MOSS enables non-business service providers of telecommunications and/or electronically supplied services to avoid individually registering in every EU state.
For MOSS purposes, Zoom has selected the Netherlands as its country of identification.
Do you have to use the VAT rate where the customer is located, or the VAT rate where Zoom’s VAT ID is located?
If the customer is located in a country where VAT is applicable, Zoom will charge the appropriate VAT rate to the customer. This is based on the location of the ‘Sold To’ address, which will be cross-referenced against other available information.
Does Zoom offer exemptions and what is the process for notifying Zoom?
Zoom will not charge VAT to customers that provide a valid VAT number (as shown on the VIES database) during the order process. The VAT system is structured in such a way that no other exemptions can be granted due to the nature of the system.
How do I enter my VAT ID?
Please follow these steps to enter your VAT ID number:
- Log in to the Zoom Portal.
- Go to the Billing page under Account Management.
- The VAT Number (which appears after the Billing Contact Address field) can be edited from the Billing Contact section.
- The VAT Number should be entered and it should be saved.
In the event that I do not possess a VAT ID, what will happen?
It is Zoom’s policy to charge and collect VAT on its supplies to you if the customer does not provide a valid VAT number (as per the VIES database).
Do I need to have Zoom’s VAT ID?
Zoom is not registered with an EU VAT number. Instead, it is registered with the non-EU MOSS scheme, which means that each country where Zoom operates does not have a separate VAT registration.
If you have provided your VAT number to Zoom, and your VAT number is shown as valid in the database of the VIES, there will be no charge of local taxes from Zoom. It is in this situation that the service qualifies as a B2B service which you may have to report in your periodic VAT return as a service purchased outside of the EU under the reverse charge mechanism (reverse charge mechanism). As long as your business activities entitle you to recover input VAT as a result of the reverse charge, the VAT accounted for under the reverse charge may be recoverable in the same VAT return as the input VAT itself.
When Zoom determines whether or not EU VAT is applicable to its customers, how does it do that?
If you have not provided a valid VAT number (as shown on the VIES database), Zoom will apply VAT based on the location of the ‘Sold To’ country entered by the Customer.
We cross-reference this information with other data to verify the accuracy of the ‘Sold to’ country.
Zoom purchased by an EU company for use in the US will be subject to VAT?
Even if the parent company or billing address is in the EU, VAT will not apply if the ‘Sold To’ address is in the US.
Generally, VAT is only charged on purchases made from the ‘Sold To’ location. In order to ensure the ‘Sold To’ address is accurate, the sold to information is cross referenced against other data.
If the application of VAT is based on the location under Billing Contact, why does my VAT number appear under Billing Contact?
Typically, the ‘Billing Contact’ and ‘Sold To’ locations are the same. The first thing a customer is asked to do is to enter the ‘Billing Contact’, which is used for the ‘Sold To’ address (unless the ‘Sold To’ address is included as a different location when the customer onboards). When this ‘Sold To’ location is located in the European Union, a VAT number is requested.
It is the location of the ‘Sold To’ contact that determines the VAT charged if the ‘Billing Contact’ and the ‘Sold To’ contacts are located at different locations. For accuracy, the ‘Sold To’ location should be cross-referenced against other information.
Can VAT be applied to purchases below a certain threshold?
If the customer does not provide a valid VAT number (as shown on the VIES database), VAT will apply to all sales of Zoom’s services.
Is there a form that a charity can submit showing that it is tax exempt, rather than entering a VAT ID number?
In most cases, charities without any business operations will not be VAT-registered. Charities rarely engage in economic activity (i.e., sales of goods/services for compensation), so they rarely have a VAT number. Consequently, charities who purchase supplies from Zoom may still be subject to VAT.
Does the Article 151 exemption apply to services provided by Zoom?
The EU VAT Directive, article 151, exempts supplies to international organizations (for example, NATO or Embassies in the EU). It is likely that you may be able to submit a VAT refund claim to your local tax authorities for the VAT charged to you by Zoom if you normally rely on the Article 151 exemption.
Customers may, however, apply to the tax authorities in the country in which they are registered for VAT for a written statement (exemption certificate) that the services they purchased from Zoom qualify for specific VAT exemptions under Article 151.
Zoom will provide you with a written statement from the tax authorities confirming that the supplies we make can be deemed exempt from VAT if the tax authorities accept your application. Please let Billing know a copy of the statement from the tax authorities.
The statement should include your registered business name as well as a note that Zoom supplies are not subject to VAT.
As a customer, do I have any VAT obligations on my part?
There will be no VAT charged to you if you have provided a valid VAT number (as shown on the VIES database). If you are required to report the purchase of services via the reverse charge mechanism in your VAT return, you may be required to do so.
Would it be possible that I could forget to enter the VAT ID if I have one?
This can be done at any time by entering the VAT number. Zoom will not charge VAT on the next invoice or any future invoices that you receive from Zoom if the payment is received before the next invoice. A VAT number (as recorded on the VIES database) cannot be entered until a valid VAT number (as recorded on the database) is entered by the time the next invoice is sent.
The VAT number entered should be valid and the VAT amount should have been included on the invoices issued to you in the thirty days prior to the date on which a valid VAT number was entered. Zoom may refund the VAT amount included on invoices issued to you in the thirty days prior to that date on which a valid VAT number was entered. In the event that the invoices are issued outside of this thirty-day period, however, the VAT will not be refunded.
If I have entered my VAT number will Zoom issue me an invoice?
If you are a business customer of Zoom, you will receive an invoice for all supplies you make.
In the invoice that you receive from Zoom, if your VAT number has been entered into your Zoom account, the invoice will include your VAT number, business name, as well as any other additional details that pertain to the goods Zoom creates for you. Nevertheless, the invoice will not have a local VAT number for Zoom since Zoom is not directly registered for VAT in any of the EU Member states.
If I do not have a VAT number will I get an invoice?
In the event that you do not provide Zoom with a valid VAT number, then local VAT will be applied to the supplies we make to you.
The Netherlands is Zoom’s country of identification for MOSS reporting for its supplies to non-VAT registered individuals and the company collects and remits these VATs through the MOSS simplification process.
MOSS requires Zoom to comply with the invoicing requirements of the country of identification, which for Zoom is the Netherlands. Dutch VAT law does not require the issue of a VAT invoice for supplies to non-VAT registered individuals.
Decision tree – will I be charged VAT?
The tax circumstances of each customer are unique. It is important to note that the information provided above should not be interpreted as tax advice, but as an overview of the relevant tax laws. Zoom cannot provide you with tax advice tailored to your particular situation, and therefore we strongly recommend contacting a tax advisor who can provide you with advice tailored specifically to your individual situation.