Non-US Sales and Indirect Tax Charges

Content

1. Why are these taxes being charged now?
2. What are Sales and Indirect taxes?
3. How are Sales and Indirect taxes determined?
4. What if my service address is wrong?
5. What if I am a reseller or tax-exempt?
   Customers in the UK
   Customers in the the EU (including the Netherlands), Iceland, Norway, Liechtenstein & Switzerland
   Customers in Malaysia
   Customers in Indonesia
   Customers in Canada
   Customers in Singapore
   Customers in Mexico
   Customers in Australia
6. How will tax be charged?
7. What if I have additional tax questions about my tax responsibilities?
8. What if I need more information about my billing/inquiry?
9. What if I need more information about this?
10. Attachments

Why are these taxes being charged now?

To continue to provide you with the exceptional level of service you expect as a Vonage API customer we’ve updated our billing system and internal processes for our prepaid customers. These updates provide customers with an updated invoice to provide more clarity on fees and a more seamless customer experience. The updates include:

• Usage-based invoicing
• Summary of all charges by country of termination
• Automated delivery of monthly invoices

Along with these enhancements, effective November 1, 2022, in accordance with our terms of use we will be applying applicable taxes based on the jurisdiction of your service address. Under our previous billing system, we were unable to apply taxes and fees to certain Vonage API products and services to our prepaid customers. With the updated system in place we are able to apply these taxes and fees to our prepaid customers in the same way we do our postpaid customers. Our prepaid customers will see these taxes where applicable in their monthly usage invoice.

What are Sales and Indirect taxes?

Sales taxes and Indirect taxes are taxes charged on the sale of a product or service. These taxes are assessed at the jurisdictional levels as applicable to our customers. This jurisdictional level is typically based on the customer's service address. Each jurisdiction categorizes Vonage API products differently and may have different regulations that determine which products and services are subject to a Sales or Indirect tax.

How are Sales and Indirect taxes determined?

We have worked closely with third-party tax advisors to determine how our products and services are taxed.

Indirect taxation of our services is based on the address where Vonage API services are consumed. Given the nature of the product, this is the customer’s main data center location.

Sales and Indirect taxes for Vonage API products are dependent on where the customer consumes them, which is determined by the customer’s service address. As a default, Vonage API uses the address our customer has provided as their service address. Customers making payments via the customer dashboard have to confirm their service address whenever a payment is made to ensure we have the correct address on file and can correctly charge taxes as required.

What if my service address is wrong?

You can check your address by going to the billing section of your customer dashboard account. Any updates or changes to your address will be reflected in your next invoice. Changes made at the end of month may not reflect until the following month.

It is your responsibility to ensure your service address is correct and updated in a timely manner.

What if I am a reseller or tax-exempt?

Resellers and tax-exempt customers (such as schools, governmental bodies, churches, and exclusively charitable organizations) should submit appropriate exemption documentation to taxexemptions@vonage.com for review and approval.

Once approved, the billing team will be notified to update the billing data to exempt status.

For country specific requirements, see the “Customers in…” sections below.

Customers in the UK

Customers in the UK are charged VAT at the standard rate.

The details below include key information that you may require for processing Vonage invoices and managing your sales tax filings:

For domestic resellers of telecommunication services in the UK, the reverse charge mechanism may apply. If applicable, customers should complete the statement template (located in the attachments section at the bottom of this article) on their company letterhead and submit to taxexemptions@vonage.com. The reverse charge will be applied from your next invoice following successful review. 

Customers in the the EU (including the Netherlands), Iceland, Norway, Liechtenstein & Switzerland

Customers in the Netherlands are charged VAT at the standard rate. For customers in all other EFTA countries, reverse charge rules apply.

The details below include key information that you may require for processing Vonage invoices and managing your sales tax filings:

For domestic resellers of telecommunication services in the Netherlands, the reverse charge mechanism may apply. If applicable, customers should complete the statement template (located in the attachments section at the bottom of this article) on their company letterhead and submit to taxexemptions@vonage.com. The reverse charge will be applied from your next invoice following successful review.

Customers in Malaysia

Vonage Business Inc. is our default service provider to our customers in Malaysia, and as a non-resident entity operating within Malaysia, is required to charge SST to our customers. Previously customers were required to apply the reverse charge rules under Malaysia tax regulations. Customers in Malaysia are charged SST at the standard rate.

The details below include key information that you may require for processing Vonage invoices and managing your sales tax filings:

Customers in Indonesia

Vonage Business Inc. is our default service provider to our customers in Indonesia, and as a non-resident entity operating within Indonesia, is required to charge VAT to our customers. Customers in Indonesia are charged VAT at the standard rate.

Important information to be provided by Indonesian customers

Customers in Indonesia displaying VAT ID (or also called as NPWP) have to ensure we have their up to date VAT ID. You can check your VAT ID by going to the billing section of your customer dashboard account. Your invoice will not show the VAT ID without this step. 

Any updates or changes to your address will be reflected in your next invoice. Changes made at the end of month may not reflect until the following month.

What is the NPWP number?

Nomor Pendaftaran Wajib Pajak (NPWP) is a 15 digit Identification Tax Number given by the Tax Office to be possessed by all mandatory taxes who receive income in Indonesia, following the provisions of the taxation legislation. NPWP must be owned by Indonesian citizens, both individuals and business entities.

The details below include key information that you may require for processing Vonage invoices and managing your sales tax filings:

Customers in Canada

Vonage Business Inc. is our default service provider to our customers in Canada, and as a non-resident entity operating within Canada, is required to collect and remit Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) on all taxable sales made into Canada, and collect the Quebec Sales Tax (QST) on any current sales made into Quebec. The Simplified Tax Regime requires that all sales of digital media to businesses located in Canada will be subject to tax unless the business provides the vendor with its GST and HST registration number and QST, if applicable.

If your organization is already registered with the CRA for GST, HST and QST, please contact us with this information at taxexemptions@vonage.com. Vonage will rely on the GST/HST/QST registration number you provide as proof of your registration status and you will not be billed the tax. You will then be required to remit GST and HST directly to the CRA and QST to Revenu Québec. 

Please note that the GST/HST and QST (as applicable) charged by Vonage under this new tax regime is not recoverable to your business as an input tax credit (“ITC”) for GST/HST purposes, or an input tax refund (“ITR”) for QST purposes. Therefore, the tax collected will be a cost to your business.

The details below include key information that you may require for processing Vonage invoices and managing your sales tax filings:

Customers in Singapore

Nexmo Pte Ltd is our default service provider to our customers in SIngapore, and is required to charge GST to our customers. Customers in Singapore are charged GST at the standard rate, except on products which are based on telecoms networks and termination is outside of Singapore, in which case GST is zero-rated.

The details below include key information that you may require for processing Vonage invoices and managing your GST tax filings:

Customers in Mexico

Vonage Business Mexico, S. de R.L, de C.V is our default service provider to our customers in Mexico (for customers billed in MXN and USD currency), and is required to charge tax to our customers. Customers in Mexico are charged VAT and Excise tax at the standard rate.

The details below include key information that you may require for processing Vonage invoices and managing your VAT and Excise tax filings:

Customers in Australia

Vonage Australia Pty Ltd is our default service provider to our customers in Australia, and is required to charge tax to our customers. Customers in Australia are charged GST at the standard rate.

The details below include key information that you may require for processing Vonage invoices and managing your GST tax filings:

How will tax be charged?

Prepaid customers being charged sales tax will receive a monthly invoice which summarizes their usage and all charges to their account. This invoice will be sent shortly after the end of each month. This invoice will include the calculation of any tax due on the services provided. 

In addition to the monthly tax invoices, customers will continue to receive receipt invoices for each payment made via the platform, and for customers wishing to pay via bank transfer, are advised to continue to generate EST pro-forma invoices via their customer dashboard. Bank transfers will only generate a receipt invoice if an EST has been generated.

Unlike usage product charges which are deducted from your account balance in real-time or subscription products such as number rentals which are charged immediately upon renewal. The tax and any recurring charges will be deducted from your Vonage account balance on or after seven days from the date of the invoice. 

It is the customers responsibility to ensure you have sufficient credit on your account to cover these charges. Should you have insufficient funds, our communication API services will automatically suspend until your accounts balance is settled.

We recommend customers utilize our low balance notification tools within your Vonage API Dashboard, as well as our auto-reload capability to enable top-ups to take place when your account balance drops below a determined value. For customers with auto-reload enabled, please ensure your top-up threshold and top-up value are sufficient to cover the taxes due, otherwise an additional top-up via Credit Card, PayPal, or Bank Transfer may be required.

To top-up your account please visit your Customer Dashboard.

What if I have additional tax questions about my tax responsibilities?

Vonage is unable to advise customers on their tax affairs, if you’re unsure how to determine your responsibilities based on your jurisdiction(s), we recommend that you reach out to your tax advisor to obtain guidance.

What if I need more information about my billing/inquiry?

Please visit our How Does Vonage Billing Work articles.

What if I need more information about this?

Although we’ve taken steps to make these updates as easy as possible, we understand that you may have questions. Submit a support request for further assistance.

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