What is VAT?
VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services that are bought and sold for use or consumption in the European Union. It is a consumption tax because it is ultimately borne by the final consumer.
Who has to pay VAT?
Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.
If you are a business customer, you should provide your VAT Identification Number to Zoom (see ‘How do I enter my VAT ID?’ below for details on how to do this). If the VAT number is valid then no VAT will be charged on the supplies made to you by Zoom. If you do not have a VAT number then VAT will be charged on the supplies made to you by Zoom.
Please note that the VAT number you provide must be registered on the VIES database to be considered as valid. Zoom will use the VIES database (an official database for checking the validity of VAT numbers issued by EU Member States) to validate VAT numbers supplied through the Zoom billing portal. In some EU Member States inclusion of a VAT number on the VIES database is not automatic. As such, you may need to apply to your relevant tax authority for your VAT number to be included on the VIES database.
Where does EU VAT apply?
EU VAT applies to EU Member States. The countries that are currently Member States of the European Union are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France (including Monaco for the purposes of VAT), Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.
Please note other European countries that are not Member States of the EU may have their own VAT system. Please refer to the FAQs for other countries for further information.
Are Norway and Switzerland included in the EU?
Norway and Switzerland are not EU Member States. Please refer to the FAQs for those countries for more information.
What is a VAT ID number?
A VAT identification number, or VAT registration number, is a unique number that identifies that a business is registered for VAT. Zoom will not charge VAT to customers that have a valid VAT number (as shown on the VIES database).
Does Zoom have a VAT ID number?
Zoom does not have a VAT registration in each individual EU Member State. Instead Zoom is registered for VAT through the non-Union Mini One Stop Shop (‘MOSS’) in the EU.
The non-Union MOSS scheme is a simplification available for taxable persons that are not established in the EU, to collect and remit VAT on supplies of telecommunications and/or electronically supplied services made to non-business customers in EU Members States.
The MOSS scheme allows suppliers of telecommunications and/or electronically supplied services to non-business customers to avoid registering individually in each EU Member State.
Zoom has selected its country of identification for MOSS purposes as the Netherlands.
Which VAT rate applies, the one where the customer is located, or the one where Zoom’s VAT ID is located?
Zoom will generally charge the VAT rate applicable based on where the customer is located. This is based on the ‘Sold To’ address location, which is subject to cross-referencing against other information.
What exemptions are available and how does a customer notify Zoom?
Customers who provide a valid VAT number (as shown on the VIES database) will not be charged VAT by Zoom. Due to the structure of the VAT system, no other exemptions are available.
How do I enter my VAT ID?
To enter the VAT ID number, please follow these steps:
- Sign into the Zoom Portal.
- Under Account Management, choose the Billing page.
- Under Billing Contact, choose to edit the VAT Number (which appears after the Billing Contact Address field).
- Enter your VAT ID number and click Save.
What happens if I do not have a VAT ID?
If a customer is unable to supply a valid VAT number (as shown on the VIES database) Zoom will charge and collect VAT on its supplies to you.
Do I need to have Zoom’s VAT ID?
No, Zoom is registered for VAT through the non-Union MOSS scheme and as such does not have an individual VAT registration in each EU Member State.
If you have provided your VAT number, and your VAT number is shown as valid in the VIES database, you will not be charged local VAT by Zoom. In this scenario, the service qualifies as a B2B service which you may be required to report in your periodic VAT return under the reverse charge mechanism as a service purchased from outside the EU. The VAT which is accounted for under the reverse charge may be recoverable in the same VAT return as input VAT insofar as your business activities entitle you to recovery of input VAT.
How is Zoom determining which customers EU VAT applies to?
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. This information is subject to cross-referencing against other data to verify that the ‘Sold to’ country is accurate.
Will VAT apply if an EU company purchase Zoom for a US location?
If the ‘Sold To’ address is in the US, even if the parent company or billing address is in the EU, VAT will not be assessed.
VAT will generally only be applicable based on the ‘Sold To’ location. However, the sold to information is subject to cross referencing against other data to verify that the ‘Sold To’ address is accurate.
Why does my VAT number appear under Billing Contact if the application of VAT is based on Sold To location?
Usually, the ‘Billing Contact’ location and ‘Sold To’ location are the same. Customers are first asked to enter a ‘Billing Contact’ location, which serves as the ‘Sold To’ location (unless the ‘Sold To’ address is specifically included as a different location when customers onboard). A VAT number is requested if this ‘Sold To’ location is in the EU.
If the ‘Billing Contact’ and ‘Sold To’ contact are in different locations, the VAT charged will be based on the ‘Sold To’ location. Please note that the ‘Sold To’ location is subject to cross-referencing against other information to confirm it is accurate.
Is there a minimum purchase threshold before VAT is applied?
No, VAT applies to all sales of Zoom’s services where a valid VAT number (as shown on the VIES database) is not provided by the customer.
Is there a form that a charity can submit showing that it is tax exempt, rather than entering a VAT ID number?
Charities that do not have any form of business operations, in most cases, will not be registered for VAT. Because charities usually do not carry out economic activities (i.e., sales of goods/services for consideration), they are mostly not in the possession of a VAT number. As such, charities may still incur VAT on the supplies they purchase from Zoom.
Does the Article 151 exemption apply to services provided by Zoom?
Article 151 of the EU VAT Directive contains an exemption for supplies to international organizations (e.g. NATO or embassies established in the EU). Since Zoom is established in the US, its supplies to international organizations in the EU are in principle subject to EU VAT. If you normally rely on the Article 151 exemption, then it may be possible for you to submit a VAT refund claim to your local tax authorities for the VAT charged to you by Zoom.
The exception to this is if a customer applies to the tax authorities in the country in which it is registered for VAT for a written statement (exemption certificate) that the services purchased from Zoom can specifically be treated as exempt from VAT in accordance with Article 151.
If the tax authorities accept your application and provide you with a written statement confirming the supplies made by Zoom can be treated as exempt from VAT, then please provide a copy of the statement from the tax authorities by chatting with Billing.
The statement should show your registered business name as well as reference to the fact that the supplies from Zoom can be treated without VAT.
Are there any VAT obligations for me as a customer?
If you have provided a valid VAT number (as shown on the VIES database) no VAT will be charged to you. However, you may have a requirement to report the purchase of services through your VAT return via the reverse charge mechanism.
What if I have a VAT ID and forget to enter it?
The VAT number can be entered at any time. If entered before the next invoice, Zoom will not charge VAT on the next invoice or future invoices issued to you. If no VAT number is entered at the time the next invoice is issued, VAT will be charged until a valid VAT number (as shown on the VIES database) is entered.
If a valid VAT number is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund for any VAT included on invoices issued in the thirty days prior to a valid VAT number being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.
If I have entered my VAT number will Zoom issue me an invoice?
Yes, Zoom will issue an invoice for all supplies made to business customers.
On the invoice you receive from Zoom if you have entered your VAT number in your Zoom account your invoice will show your VAT number, business name as well as other details specific to the supplies Zoom makes to you. However, the invoice will not show a local VAT number for Zoom as Zoom is not directly registered for VAT in any EU Member State.
If I do not have a VAT number will I get an invoice?
If you do not provide a VAT number, then local VAT will be charged on the supplies made to you by Zoom.
For supplies to non-VAT registered individuals, Zoom collects and remits this VAT through the MOSS simplification and has selected the Netherlands as its country of identification for MOSS reporting.
Under the MOSS rules the invoicing requirements that apply to Zoom are the invoicing requirements that apply in the country of identification, which for Zoom is the Netherlands. Under Dutch VAT rules there is no formal requirement to issue a VAT invoice for supplies to non-VAT registered individuals.
Decision tree – will I be charged VAT?
Every customer is unique and so are their specific tax circumstances. The above stated information should not be considered as tax advice, but as a general overview of relevant tax rules. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.