Frequently asked questions about KSA 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 KSA. 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 General Authority of Zakat and Tax (“GAZT”) in the KSA.

If you are a business customer, you should provide your VAT Number to Zoom (see ‘How do I enter my VAT Number?’ below for details on how to do this). If the VAT number is valid then no VAT will be charged on the supplies made to you by Zoom. If you do not have a VAT number, then VAT will be charged on the supplies made to you by Zoom.

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 the KSA. 

ESS supplied to end customers in the KSA (commonly referred to as B2C supplies as the recipient is not registered for VAT) are subject to KSA VAT.

For ESS supplied to business customers (commonly referred to as B2B supplies) Zoom will not charge VAT to customers in the KSA. Instead the VAT on B2B supplies of ESS should be self-accounted via the reverse charge mechanism by the recipient of the supply (e.g., the KSA business that purchases the supply from Zoom).

What is a VAT number?

A VAT number (or Tax Registration Number - “TRN”) is a unique numeric 15-digit number that identifies a person/entity as being registered for VAT purposes in the KSA.

Does Zoom have a VAT number?

Yes, Zoom will include its TRN on the tax invoices issued as appropriate. Zoom’s KSA VAT registration certificate may be found here.

How do I enter my VAT Number?

To provide your KSA VAT number, follow the steps below depending on where your billing portal is located in the left navigation menu of the Zoom web portal. Not sure how to identify where your billing portal is located? Learn how to locate your billing settings.

Zoom performs periodic validation checks of customer TRNs to ensure that the TRN remains valid. If, during these periodic validations, it is identified that your TRN is no longer valid, Zoom may automatically update your account so that future invoices are subject to VAT.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 TRN is provided.

You are required to notify us if there is a change to your VAT registration status.

What happens if I do not have a VAT Number?

If a customer in KSA is unable to supply a valid KSA VAT number Zoom will charge and collect KSA VAT on its supplies to you.

How is Zoom determining which customers KSA VAT applies to?

If you have not provided a KSA VAT number and you are resident in KSA Zoom will charge KSA VAT on it supplies to you.

Zoom will treat any customers with a ‘Sold To’ address as being resident in KSA. 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 KSA company purchases Zoom for use in a location outside of KSA?

Generally, services provided by Zoom to a customer that is not resident in the KSA should not be subject to KSA VAT.

Is there a minimum threshold purchase amount before VAT is applied?

No, VAT applies to all sales of Zoom’s services where a customer is resident in KSA and a valid KSA VAT number is not provided by the customer.

What exemptions are available?

Based on the current VAT legislation in KSA, all services currently provided by Zoom are subject to VAT in KSA. If you have provided a valid KSA VAT number then no VAT will be charged; however, you may be required to self-account for VAT under the reverse charge mechanism.

Are there any special exemptions applicable for charities under which VAT may not be charged?

No, based on current KSA VAT legislation, there should not be any special exemptions applicable for supplies made by Zoom to charities in KSA.

However, if the charity is VAT registered and has provided Zoom with its VAT number, Zoom can generally issue an invoice which does not show any KSA VAT due. In this scenario the customer may have a requirement to report the purchase of services through its VAT return via the reverse charge mechanism.

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. However, you may have a requirement to report the purchase of services through your VAT return via the reverse charge mechanism.

If I have entered my VAT number will Zoom issue me an invoice?

Yes, Zoom will issue an invoice for all supplies made to business customers.

On the invoice you receive from Zoom if you have entered your VAT number in your Zoom account your invoice will show your VAT number, business name as well as other details specific to the supplies Zoom makes to you. 

If I do not have a VAT number will I get an invoice?

Yes, Zoom will issue an invoice for all supplies made to non-business customers where VAT is charged.

What if I have a VAT Number and forget to enter it?

The VAT number can be entered at any time. If entered before the next invoice is issued, Zoom will not charge VAT on the next invoice or future invoices issued to you. If no VAT number is entered at the time the next invoice is issued, VAT will be charged until a valid VAT number is entered. 

If a valid VAT number is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund for any VAT included on invoices issued in the thirty days prior to a valid VAT number being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.

Decision tree – I am resident in KSA, will I be charged VAT?

Disclaimer

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.