Frequently Asked Questions – Colombia 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 Colombia. 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.
Where electronically supplied services (ESS) are provided by a supplier that is non-resident in Colombia (as is the case for Zoom) the responsibility to collect and remit VAT may shift to a VAT agent in Colombia.
VAT agents may be both businesses and individuals. To determine whether you meet the criteria of a VAT agent please consult with your tax advisor. If you are a VAT agent, you should also provide your valid RUT to Zoom (see “How do I enter my VAT agent status?”).
Why am I being charged VAT?
Under Colombian VAT rules, Zoom is required to collect and remit Colombian VAT on services provided to customers who are located in Colombia but are not VAT agents.
How do I enter my VAT agent status?
Note: Starting July 17, 2023, certain account owners and admins will notice a dedicated Plans and Billing section within their ADMIN menu.
If you are a VAT agent, to enter your VAT agent status on the Zoom billing portal, please follow the steps below:
- Sign in to the Zoom web portal.
- Under Account Management, click Billing.
- Click Billing Information.
- Under Billing Contact, choose to enter the VAT number (which appears after the Sold To Contact Address field).
- Enter your Tax ID Number (RUT) and click Save.
Zoom utilizes a real-time validation against the tax authority database to confirm that the RUT provided relates to a VAT agent in Colombia. You are required to notify us if there is a change to your VAT agent status.
Further, Zoom performs periodic validation checks of customer RUTs to ensure that the RUT remains valid and indicates that a customer is a VAT agent. If, during these periodic validations, it is identified that your RUT is no longer valid or no longer indicates that you are a VAT agent, Zoom may automatically update your account so that future invoices are subject to VAT. Where this happens, VAT will be charged on all future invoices until such time that a valid RUT indicating that you are a VAT agent is provided. To provide an updated RUT, refer to the above steps.
What happens if I am not a VAT agent?
If a customer in Colombia is not a VAT agent Zoom will charge Colombian VAT on its supplies to you.
How does Zoom identify the location of the customer for VAT purposes?
Zoom will treat any customers with a ‘Sold To’-address in Colombia as being resident in Colombia. 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.
Is there any threshold for VAT on electronically supplied services?
No, VAT applies to all sales of Zoom’s services in Colombia where the customer is not a VAT agent.
Are there any special exemptions applicable for charities under which VAT may not be charged?
No, VAT will be charged on all supplies made to charities unless the customer is a VAT agent.
Does Zoom provide VAT exempt or services not subject to VAT?
Customers who provide evidence that they are VAT agents, by means of a valid RUT which indicates VAT agent status, will not be charged VAT by Zoom. There are currently no other exemptions available.
VAT agents may be required to self-assess Colombian VAT on the services purchased from Zoom.
Are there any VAT obligations for me as a customer?
Customers who are VAT agents may need to self-assess VAT on the services purchased from Zoom.
If you are an educational institution and you provide an RUT number to Zoom, meaning that VAT is not charged on the invoices issued to you, you confirm that Box 53 of the RUT indicates you are responsible to report VAT under the reverse charge. If this condition is not met by you then you are required to notify Zoom and Zoom reserves the right to charge VAT on its supplies to you.
You are required to notify Zoom if there is a change in your VAT agent status.
What if I am a VAT agent and forget to inform Zoom?
Confirmation of your status as a VAT agent in Colombia can be entered at any time into Zoom’s billing portal by entering a valid RUT which indicates you are a VAT agent. If a valid RUT indicating VAT agent status is entered before the next invoice is issued, Zoom will not charge VAT on invoices issued to you. If a valid RUT indicating VAT agent status has not been entered at the time the next invoice is issued, VAT will be charged.
If a valid RUT indicating VAT agent status is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund any VAT included on invoices issued in the thirty days prior to a valid RUT being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.
Decision tree – will I be charged Colombian 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.
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