Beginning February 1, 2019, Zoom will begin collecting Value Added Tax (VAT) for countries in the European Union.
Frequently Asked Questions
What is VAT?
VAT is the abbreviation of Value Added Tax and is, in general, due when goods and/or services are sold. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union. It is a consumption tax because it is borne ultimately by the final consumer.
Who has to pay VAT?
Generally, VAT is payable by the supplier who is selling goods or services to its customers. The VAT is invoiced by the supplier and collected from the customer, and subsequently, the supplier remits the collected VAT to the government. (Note: In case of cross-border transactions with goods and services, business customers (B2B) might be required to self-account for local VAT under a so-called "reverse charge rule" (i.e. the recipient reports local VAT in its local return). Depending on the business customer's activities/recovery ratio, the reported VAT can be reclaimed as an input VAT. In other words, the liability to report local VAT is being shifted from the supplier to the business customer.)
Where does EU VAT apply?
EU VAT applies to EU member states through the VAT Directive, which is individually applied through national legislation by each EU member. Non-EU member states may have their a separate VAT system.
Is there a minimum threshold purchase amount before VAT is applied?
No. VAT applies to sale of Zoom’s services in case no valid VAT number can be provided.
How is Zoom determining which customers EU VAT applies to?
Zoom will apply VAT based on the location of the “Sold To” contact entered by the Customer. If located in an EU member state, Zoom will charge and collect VAT (only if no valid VAT number is provided).
Why does my VAT number appear under Billing Contact if application of VAT is based on Sold To location?
Usually, the Billing Contact and Sold To location are the same. Customers are first asked to enter a Billing Contact location, which also serves as the Sold To location (unless specifically noted as different). A VAT number is requested if this location is in the EU.
The locations are only different if the customer specifically indicates that the Sold to location is different, and then enters a second location address. If the Billing Contact and Sold To contact are in different locations, VAT applicability will be based on Sold To location only.
Why is Zoom assessing EU VAT as of February 1?
Zoom has undertaken an assessment of its services and determined that some are subject to EU VAT. Additionally, as Zoom grows its international presence, it has implemented the systems necessary to identify customers who are subject to VAT, accept VAT numbers, and properly reflect charges on invoices. Zoom will begin assessing EU VAT on February 1 on invoices and transactions going forward. No invoices issued prior to that date will be impacted.
What is a valid VAT ID?
A VAT identification number, or VAT registration number, is a unique number that identifies the person or business as registered for VAT. Zoom will not charge VAT to customers who have a valid VAT ID number. 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.
How do I enter my VAT ID?
To enter the VAT ID number, please follow these steps:
- Log in to 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 save
What happens if I don’t have a VAT ID?
If you are unable to supply a valid VAT ID, Zoom will charge and collect VAT starting on February 1, as reflected on invoices generated on or after that date.
What exemptions are available and how does a customer notify Zoom?
Customers who provide a valid VAT number will not be charged VAT by Zoom. Due to the structure of the VAT system, no other exemptions are available.
Why did I get a notification email if I am not located in the EU?
In order to ensure complete and thorough notification to any of our customers who may be impacted, we sent the notification communication to all customers who had a Bill To OR Sold To address in EU. If you are not responsible for a “Sold To” address in the EU, you may disregard the communication. Assessment and collection will be based on the Sold To contact address only.
Are Norway and Switzerland included?
For purposes of collecting EU VAT ID numbers, and assessing EU VAT on or after February 1, Norway and Switzerland are not included at this time, as they are not EU member states. These and other non-member states may be considered at an appropriate time in the future.
Are there any VAT obligations for me as a customer?
If you have provided a valid VAT number, no VAT will be charged to you. If this is the case, you should report the purchased services in your VAT return and self-assess VAT through the “reverse charge rule”. Depending on your activities/recovery ratio, the reported VAT can be reclaimed as input VAT in the same VAT return.