Does Twilio Charge VAT?

Nonresident entities, such as Twilo are now required by certain foreign taxing authorities to collect Value-Added Tax (VAT) on its sales of its services to customers located in the below jurisdictions.

Notice: If you consume Twilio services within the United States, you may be subject to State and Local Sales Taxes.

Value-Added Tax (VAT)

Starting July 1st, 2019, Twilio will begin collecting Value-Added Tax (VAT) on the services sold to its international customers located in certain foreign jurisdictions.

Who will be charged VAT?

Any international customer with a business/service address in the list of countries provided below:

  • Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden
  • United Kingdom
  • Liechtenstein
  • Monaco
  • Norway
  • Switzerland

VAT Frequently Asked Questions

This change is bound to generate a number of questions from new and existing customers. Please see the following FAQs for answers to some of the most common concerns.

Why am I charged VAT?

Your service address indicates you live in one of the countries we are required to collect and remit VAT for sales to customers located in the EU, Norway, or Switzerland. You can find the full list of countries above. If your service address is not where you consume Twilio’s products, you can update it in the Twilio Console.

How is VAT determined?

VAT is applied based on where the customer consumes Twilio’s products and services. Tax rates will be consistent with what the customers currently pay for relevant goods and services in their country or jurisdiction. The services provided are under the categories of Electronically Supplied Services & Telecommunications. Twilio uses your service address for tax calculation purposes. If your service address is not where you consume Twilio’s products, you can update it in the Twilio Console.

Twilio is a not a resident of the EU, why are you charging VAT?

Twilio Inc. (“Twilio”) is a non-EU entity selling to customers located in the EU and has determined that the type of services we sell are subject to EU VAT. In order to comply with the EU VAT laws, Twilio will be imposing VAT on any cloud communication services (i.e. programmable SMS, programmable voice) that are subject to EU VAT commencing sales made on July 1, 2019. All B2C customers and B2B customers, that have not provided a valid EU VAT registration will be subject to the EU VAT on their purchases of any applicable Twilio services. The services will be subject to the local VAT rate in the jurisdiction where the customer is located.

What products are taxable?

European Value Added Tax (“VAT”) laws require non-resident European Union (“EU”) entities to impose VAT on sales of electronically supplied services and telecom services to customers located in the EU. Non-EU entities are only required to collect and remit VAT from Business to Consumer (“B2C”) customers and are not required to impose VAT on Business to Business (“B2B”) customers, as long as a valid VAT registration number has been provided to the seller. However, B2B customers must report the VAT on their end through the reverse charge mechanism (self-assess).

How can I be Tax Exempt for VAT?

Twilio is only required to impose VAT on Business to Customer (“B2C”) transactions. Business to Business (“B2B”) customers are tax exempt with a valid VAT number. B2B transactions are subject to self-assessment (reverse charge).

Notice: For customers located in Switzerland, Lichtenstein, and Ireland customers contracted with Twilio Ireland, we are required to apply VAT for both B2B and B2C customers.

If you are a VAT registered B2B customer, please add your VAT number in Twilio Console to be issued a valid tax invoice and for self-assessment (reverse charge) before the current month’s usage to prevent taxation.

How do I enter my VAT number?

You can enter your service address and VAT number on the Billing Preferences page in Console. The specific field may be called Business Tax ID or VAT number, depending on the country selected.

For more details, please see Add or Update the Service Address or Tax ID on your Twilio Project.

I entered a VAT number in my Twilio Console. Why am I getting charged VAT?

Your VAT number may be invalid. Please double check to see if you have input the correct VAT registration number with the standard formatting for your country.

Do I need to provide a resale certificate to be tax exempt?

No, you don't need to provide a resale certificate, but you will need to enter a valid VAT number in the Twilio console to be considered tax exempt. All EU customers that have not provided a valid EU VAT registration number will be subject to the EU VAT on their purchases of any applicable Twilio services.

I forgot to enter my VAT number, but should be tax exempt. Can I get a refund for this month’s VAT?

It may be possible to receive a refund if requested within 90 days, depending on your location:

  • If you are a B2B customer with a valid VAT registration number in the EU or Norway, please contact our Support team for a refund or credit for the VAT amount charged.
  • If you are a B2B customer in Switzerland, Twilio is unable to issue a refund or credit for VAT, as non-residents are obligated to collect VAT from ALL customers (B2B and B2C). That said, B2B Swiss customers are entitled to reclaim the VAT charged upon receipt of a valid Swiss VAT invoice from Twilio under the Swiss VAT recovery rules.

Where do I see VAT amount on my invoice?

VAT for the previous month is assessed on the first day of the following month. For example, you will be charged VAT for your July usage in August. You can see the VAT amount charged in the Usage Summary or Usage Details sections of your invoice. Your invoice will continue to show usage and taxes in the same currency as before.

Example Usage Summary
VAT_01_500px.png

Example Usage Details
VAT_02_500px.png

For additional help understanding an invoice, please see Reading your Twilio Invoice.

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