VAT on Teachable

This article goes over how school owners can handle collecting and remitting EU VAT. It also reviews information on student receipts.

Overview

European Union Value Added Tax (VAT) is charged on purchases made by consumers in the EU. VAT applies to any merchant selling a product or service (including digital products like an online course) to a consumer based in Europe. In general, the location of the merchant doesn't matter—it is the location of the consumer that determines whether or not VAT should be applied.

NOTE: These are general recommendations. Teachable cannot give tax or financial advice and is not liable for any losses or tax liabilities due to actions taken (or not taken) based on these recommendations. Always consult a local tax professional when planning your taxes.

Charge, collect, and remit VAT

Teachable automatically charges VAT on all purchases made from the EU, regardless of which payment gateway processes the transaction.

By default, Teachable will also collect and remit VAT to the EU for any transaction that occurs through Teachable’s native payment gateways (the Monthly Payment Gateway or Teachable Payments). You can see whether or not Teachable has filed VAT for a transaction by going to the individual transaction details:

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NOTE: Creators processing transactions through a custom payment gateway are solely responsible for remitting VAT to the relevant EU authority. Teachable will not file VAT for these transactions.

Student VAT IDs

If a student intends to purchase the course as a business entity and has a valid VAT ID, they may enter their VAT ID on the checkout page. This will ensure that the transaction is processed as a sale to a business entity. If a student is located in the EU and they do not enter a valid VAT ID, the transaction will be processed as a sale to a consumer and VAT will be charged.

NOTE: The reverse charge rule applies to most sales to a business entity. If the reverse charge rule applies, VAT will not be charged. However, per intra-community supply rules, if the supplier and the student are established in the same EU country, VAT will be charged. The receipt will note whether the transaction is subject to reverse charge or the intra-community supply of services, as applicable.

If a student inputs their VAT ID at checkout, the VAT ID number will be listed in your transaction CSV report.

Note that students must include the two-digit country code when entering in their VAT ID at checkout.

Student receipts

The initial purchase receipt issued to students will include VAT information, as applicable. In accordance with VAT requirements, the receipt will display your student’s address, along with the student’s VAT ID (when applicable).

The format of the receipt will depend on what payment gateway the transaction is processed on.

The template for these receipts can be modified in the Emails > Template Editor > Students > Receipt section of your school admin.

Teachable Payments or the Monthly Payment Gateway

If a transaction is processed by one of Teachable Native Gateways (the Monthly Payment Gateway or Teachable Payments), Teachable is the Supplier of the content and responsible for collecting and remitting VAT. As such, Teachable’s VAT ID and address will appear in the Supplier section of the student invoice, while your school name will appear as the Provider.

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If a student inserts a VAT ID at checkout for a purchase made on Teachable Payments or the Monthly Payment Gateway, then their VAT ID will be listed in the Purchased by section of the receipt.

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NOTE: Teachable's VAT ID is EU372005114. Our address is 470 Park Avenue South, Floor 6N New York NY, 10016.

Custom payment gateways

If a transaction is processed by a custom payment gateway, you, as the Creator, are the Supplier of the Content and responsible for collecting and remitting VAT. As such, your school’s VAT ID and address will appear in the Supplier section of the invoice.

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If a student inserts a VAT ID at checkout for a purchase made on a custom payment gateway, then their VAT ID will be listed in the Purchased by section of the receipt.

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NOTE: Per intra-community supply rules, if the supplier and the student purchasing the content are established in the same EU country, VAT will be charged.The receipt will note whether the transaction is subject to the intra-community supply of services.

To add or modify your VAT ID, navigate to the Settings > Taxes section of your school admin. Then, enter your VAT ID—including the country code—in the VAT ID field:

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To modify the school address that appears on student receipts, navigate to the Settings > General > Address section of your school admin.

VAT rates

Each EU member state sets its own VAT rate, which may change from time to time. Teachable will apply the VAT rate set by the EU country where the user is located. Teachable determines where a user is located based on a combination of factors.

Display VAT inclusive pricing

You can choose to display VAT inclusive prices on your course’s sales page, and your school’s course directory in the Settings > Taxes section of your school admin.

When VAT inclusive pricing is enabled, Teachable will automatically add VAT to your course price and display the total as your course price to students subject to EU VAT on the course sales page, school homepage, and course directory. While the precise VAT amount won’t be noted on these pages, students will see the precise VAT amount they will be charged on the checkout page in the Order Summary section.

To enable VAT inclusive pricing, turn on the Show VAT Inclusive Prices toggle.

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Disable VAT collection

VAT collection can be disabled by primary owners in Settings > Taxes by disabling the Enable VAT Tax toggle.

NOTE: VAT collection should only be disabled in cases where the school qualifies for a VAT exemption. Creators should consult their tax advisors before disabling VAT collection. 

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If you switch between enabling/disabling VAT collection, subsequent course subscription charges will be the same as the initial subscription charge. For example, if VAT collection was disabled at the time of purchase, then VAT will not be charged if you enable VAT collection after the initial subscription charge.

View VAT fees in your transaction history

If you’ve set up custom payment gateways, and are therefore responsible for remitting VAT payouts, then you can use Teachable’s transaction reporting tools to determine the VAT rates charged to your students.

You can calculate this by exporting your transaction data in the Sales section of your school admin. Once you have downloaded a CSV of your transaction data, you can reference the VAT Fees and Charge Country columns to determine your tax liability.

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