What is VAT?
VAT is the abbreviation of Value Added Tax, which is levied at a rate of 16% on most goods and services bought and sold deemed to be for use or consumption in Mexico. It is generally due when goods and/or services are paid for. It is a consumption tax because it is generally borne ultimately by the final consumer. VAT is a recoverable tax, and VAT registrants can generally claim an input tax credit on VAT incurred in the course of commercial activity. In other words, VAT is usually not a net cost to registered entities (businesses).
Who must pay VAT?
Generally, the customer must pay VAT on taxable goods or services acquired from its supplier in Mexico. The VAT is invoiced by the supplier and collected from the customer, and subsequently, the supplier remits the collected VAT to the government.
Where does VAT apply?
VAT generally applies to most transactions for consumption in Mexico.
How does Zoom determine which customers are subject to VAT?
Zoom will generally apply VAT in any of the following scenarios:
- The location of the “Sold To” contact address entered by the Customer is in Mexico.
- The payment to Zoom is made through an intermediary located in Mexico.
- The IP address used by the electronic devices of the Customer corresponds to the range of addresses assigned to Mexico.
- The Customer has provided to Zoom a telephone number with Mexico´s country code.
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, VAT will generally be applied, regardless of the location of the consumption or the use by the Mexican company.
Is there a minimum threshold purchase amount before VAT is applied?
No. VAT applies to sale of all Zoom’s services.
What exemptions are available and how does a customer notify Zoom?
There are no exemptions available as all services provided by Zoom in Mexico are taxable supplies.
Are there any special exemptions applicable for charities under which VAT may not be charged?
The rules apply in the same manner to charities as ordinary businesses.
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.
How do I enter my tax ID (“RFC”) number?
If you wish to get a tax invoice with your RFC number, please follow these steps:
- Log in to the Zoom Portal.
- Under Account Management, click Billing.
- Click the Billing Information tab.
- Under Billing Contact, choose to enter the tax registration number (which appears after the Sold To Contact Address field).
- Enter your RFC number and save.