What is GST?
GST is the abbreviation of Goods and Services Tax. GST 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 Australia. It is a consumption tax because it is ultimately borne by the final consumer.
Who must pay GST?
Generally, GST is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected GST to the tax authorities.
If you are a business customer, you should provide your Australian Business Number (“ABN”) to Zoom (see ‘How do I enter my ABN ID?’ below for details on how to do this). If the ABN is valid then no GST will be charged on the supplies made to you by Zoom. If you do not have an ABN, then GST will be charged on the supplies made to you by Zoom.
If you have provided your ABN, you may be required to self-account for Australian GST under the “reverse charge rule". This should apply where the customer would not otherwise be entitled to claim a full input tax credit (had GST been charged on the supply). In these circumstances, the customer reports Australian GST in its GST return and will need to assess its entitlement to claim any portion of the GST as an input tax credit.
Why am I being charged GST?
An overseas service provider (such as Zoom) that provides Electronically Supplied Services (ESS) to customers in Australia is required to charge GST on its supply to Australian customers who are not registered for GST (this is referred to as a “B2C” supply).
GST is generally not chargeable if ESS are provided to a customer that is registered for GST in Australia (this is referred to as a “B2B” supply).
What is an ABN number?
An ABN, or Australian Business Number, is a unique 11-digit number that identifies a customer that conducts business in Australia to the government and community. When Zoom collects the ABN and a declaration from the customer that it is registered for GST, the Australian Taxation Office (ATO) will usually consider the sale as a B2B supply and, therefore, not subject to GST. Zoom will use available resources to verify the ABN provided. However, if the information provided is found to be incorrect, Zoom reserves the right to charge and collect an additional amount in respect of GST related to the transactions.
Does Zoom have an ABN number?
Zoom has a simplified GST registration as it is a non-resident entity business that is supplying ESS to customers in Australia. As such, Zoom has an ATO Reference Number (ARN) and will only collect GST on B2C supplies to customers in Australia.
What is the difference between an ABN and ARN number?
An ABN is issued to businesses that are resident in Australia. An ARN is issued to a non-resident business that has a requirement to collect and report Australian GST as it makes supplies of services/ grants rights to Australian residents who are not registered for GST.
An ARN is a unique identifier that indicates the non-resident business is registered for Australian GST under a “simplified GST registration”. An ABN is 11 numeric digits and ARN consists of 12 numeric digits.
How do I enter my ABN?
If you are registered for GST, to enter your ABN, please follow these steps:
- Sign in to the Zoom Portal
- Under Account Management, click Billing.
- Click the Billing Information.
- Under Billing Contact, choose to enter the ABN number (which appears after the Sold To Contact Address field)
- Enter your ABN and save.
What happens if I do not have an Australian Business Number?
If a customer in Australia is unable to provide a valid ABN, Zoom will charge and collect Australia GST on its supplies to you.
How is Zoom determining which customers GST applies to?
If you have not provided an ABN and you are resident in Australia, Zoom will charge Australian GST on it supplies to you.
Zoom will treat any customers with a ‘Sold To’ address in Australia as being resident in Australia. This information is subject to cross-referencing against other data to verify that the ‘Sold to’ country is accurate.
It is your responsibility as a customer to ensure that your sold to address is accurate.
Will GST apply if an Australian company purchases Zoom for use in a location outside of Australia?
If the “Sold To” address is in a location outside of Australia, even if the billing address is in Australia, GST will not be assessed on the basis that the Zoom product will be for “use” outside of Australia. GST will generally only be applicable if the “Sold To” address is in Australia. This information is subject to cross-referencing against other data to verify that the ‘Sold to’ country is accurate.
Why does my ABN appear under Billing Contact if application of GST 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 serves as the Sold To location, as well (unless specifically noted as different). The ABN is requested if this location is in Australia and the Customers will be required to enter an ABN if they are registered for GST.
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, GST will apply if the “Sold To” location is in Australia (unless the Customer provides an ABN).
Is there a minimum threshold purchase amount before GST is applied?
No. GST applies to all sales of Zoom’s services in Australia if the customer has not provided a valid ABN to Zoom.
What exemptions are available and how does a customer notify Zoom?
Customers who provide a valid ABN will not be charged GST by Zoom. There are currently no other exemptions available.
Are there any special exemptions applicable for charities under which GST may not be charged?
No. Charities are not eligible for special exemptions unless they provide a valid ABN.
Are there any GST obligations for me as a customer?
If you have provided a valid ABN, no GST will be charged to you. However, in this case, you will need to assess whether you are required to self-assess GST under the “reverse charge rule” (which depends on the nature of your activities and whether you would otherwise have been entitled to claim a full input tax credit had GST been charged by Zoom). You will need to assess whether you are entitled to claim any part of the reported GST as input tax credit in the same GST return.
What if I have an ABN and forget to enter it?
Your ABN can be entered at any time. If entered before the next invoice is issued, Zoom will not charge GST on the next invoice or future invoices issued to you. If no ABN is entered at the time the next invoice is issued, GST will be charged until a valid ABN is entered.
If a valid ABN is entered and GST has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund any GST included on invoices issued in the thirty days prior to a valid ABN being provided. However, GST will not be refunded on any invoices issued outside of this thirty-day period.
Decision tree – will I be charged Australia GST?
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.