Frequently Asked Questions – Mexico VAT
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 Mexico. It is a consumption tax because it is ultimately borne by the final consumer.
Who must 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.
Why am I being charged VAT?
Video conferencing services and telecommunication (in the form of electronic communication services) supplied by Zoom fall within the rules concerning Electronically Supplied Services (ESS) in Mexico. As such, Zoom is required to collect Mexican VAT on all supplies of ESS made to customers in Mexico.
How does Zoom determine which customers are subject to VAT?
If a customer's ‘Sold To’ location is in Mexico, Zoom will charge VAT on its invoices.
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 VAT apply if a Mexican company purchases Zoom’s services for the use in another location, outside of Mexico?
If any of the four scenarios mentioned above occurs, Mexican VAT will be applied.
Is there a minimum threshold purchase amount before VAT is applied?
No, VAT applies to all of Zoom’s services supplied to customers in Mexico.
What exemptions are available and how does a customer notify Zoom?
There are no exemptions from VAT available on the supplies made by Zoom to customers in Mexico.
Are there any special exemptions applicable for charities under which VAT may not be charged?
No, VAT will be charged on all supplies made by Zoom to charities in Mexico.
Is Zoom required to issue an e-invoice through the Mexican government portal?
Zoom is registered for VAT in Mexico through a specialized registration that was introduced from 1 June 2020 by the Mexican tax authorities. This registration requires companies that are not resident in Mexico to register for VAT and collect VAT on supplies of digital services to all customers in Mexico. As Zoom is not a resident company in Mexico, Zoom is therefore not obligated to issue invoices (facturas) in accordance with the e-invoicing obligations that apply to resident taxpayers in Mexico.
Article 18-F of the Value Added Tax Law specifically states that the recipient of the service may take the corresponding input VAT credit, with no requirement for an official e-invoice issued by the non-resident service provider.
Are there any VAT obligations for me as a customer?
No, but if you are a Mexican business, you are entitled to get a tax invoice from Zoom, which may be used to claim the VAT as input tax credit in accordance with the tax regime applicable to you. As such, you should provide your RFC (“Registro Federal de Contribuyentes”) to Zoom so that it can include your RFC on any invoices it issues to you.
How do I enter my tax ID (“RFC”) number?
Note: Starting July 17, 2023, certain account owners and admins will notice a dedicated Plans and Billing section within their ADMIN menu.
If you wish to get a tax invoice with your RFC number, please follow these steps:
- Sign in to the Zoom web portal.
- Under Account Management, click Billing.
- Click the Billing Information.
- Under Billing Contact, choose to enter the tax registration number (which appears after the Sold To Contact Address field).
- Enter your RFC number and click Save.
What if I have an RFC and forget to enter it?
The RFC may be updated at any time into Zoom’s billing portal. Once the RFC is entered it will show on your next invoice. Zoom will not credit and reissue historic invoices where an RFC is not shown, as such, it's important to make sure your RFC is included in your Zoom account.
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.
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