If you sell online courses to students in the European Union, you’re not just teaching-you’re running a cross-border business with complex tax rules. The EU doesn’t let you ignore VAT just because your course is digital. In 2025, failing to handle VAT correctly can mean fines, payment holds, or even platform bans. And it’s not just the EU. Countries like Australia, Brazil, and Japan also charge sales tax on digital products. So which course platform actually handles this for you-and which leaves you scrambling?
Why EU VAT Isn’t Optional for Course Sellers
The EU changed the game in 2015 with the Mini One Stop Shop (MOSS) system, and then made it even simpler in 2021 by merging it into the One Stop Shop (OSS). Now, if you’re a business selling digital services-like online courses-to private customers in any EU country, you must charge VAT based on the customer’s location. Not your location. Not your bank’s location. Theirs.
For example: a student in Germany buys your $199 course. You’re based in New Zealand. You don’t charge German VAT? You’re breaking EU law. The EU doesn’t care if you’re a solo creator or a company with 50 employees. If you sell to consumers in the EU, you collect and remit VAT.
The rate? It varies. Germany is 19%, France is 20%, Ireland is 23%, and Hungary is 27%. You can’t just charge 20% and call it done. You need to know where each buyer lives and apply the right rate. And yes, you need to keep records for ten years.
How Course Platforms Handle VAT and Sales Tax
Not all platforms are built the same. Some treat tax compliance like an afterthought. Others automate it completely. Here’s how the top platforms stack up in 2025.
Teachable: Automatic VAT Collection, But Limited Global Coverage
Teachable automatically calculates and collects EU VAT for you. It detects the buyer’s location using IP address and billing info, applies the correct rate, and files monthly OSS returns. You don’t need to register for VAT in each EU country. That’s huge.
But here’s the catch: Teachable only handles VAT for EU, UK, Australia, and a few other countries. If you sell to customers in Brazil, India, or South Korea, you’re on your own. You’ll need to manually register for tax in those countries or use a third-party service like TaxJar or Avalara.
Teachable also doesn’t collect sales tax for U.S. states unless you’re using their Advanced Tax Settings plan. That’s a $59/month upgrade. For most creators, the $39/month plan is enough-but you’ll miss out on U.S. state tax automation.
Thinkific: Full Automation, Stronger Global Support
Thinkific goes further. It automatically handles EU VAT, UK VAT, Australian GST, Canadian GST/HST, and U.S. state sales tax-all on the $49/month plan. No upgrades needed. It pulls buyer location data from multiple sources, including VAT ID verification for B2B sales, and files OSS returns on your behalf.
Thinkific also supports tax collection in Japan, South Korea, Singapore, and Switzerland. If you’re selling to 15+ countries, Thinkific reduces your tax workload by 80%. You still need to monitor your revenue thresholds (like Japan’s ¥10 million annual sales limit), but the platform does the heavy lifting.
One downside: Thinkific doesn’t auto-generate invoices with VAT numbers unless you manually add your business details. That’s a small friction point if you’re selling to businesses that need compliant invoices.
Kajabi: Good for Marketing, Weak on Tax
Kajabi is great for building sales funnels, email sequences, and membership sites. But when it comes to tax? It’s behind. Kajabi collects EU VAT automatically-but only if you’re on the Pro plan ($199/month). Even then, it doesn’t handle Australian GST or Canadian taxes. You’re forced to manually calculate and remit taxes for non-EU markets.
Plus, Kajabi doesn’t support VAT ID validation for B2B sales. That means if a business in France buys your course with a valid VAT ID, Kajabi still charges them VAT. That’s illegal under EU rules. You’d need to manually override it or lose the sale.
Podia: Simple, But Not Comprehensive
Podia handles EU VAT and UK VAT automatically on its $39/month plan. It’s clean, easy, and doesn’t overwhelm you with options. But it doesn’t support sales tax in the U.S., Australia, or Canada. If you have students in those regions, you’re responsible for collecting and filing taxes yourself.
Podia’s interface is minimal, which is great for beginners. But if you’re scaling beyond the EU and UK, you’ll hit a wall fast. No auto-invoicing. No tax reporting exports. No support for VAT-exempt B2B buyers.
What You Need to Know About B2B vs B2C Sales
There’s a critical difference between selling to individuals (B2C) and selling to businesses (B2B). For B2C, you charge VAT. For B2B, you don’t-if the buyer gives you a valid VAT ID.
Think of it this way: If a marketing agency in Spain buys your course for their team, they should provide their Spanish VAT number. If they do, you don’t charge VAT. You just note their VAT ID in your records. If they don’t? You charge Spanish VAT.
Platforms like Thinkific and Teachable let you toggle VAT exemption when a customer enters a valid VAT ID. Kajabi and Podia? They don’t. That’s a red flag if you’re targeting corporate clients.
What Happens If You Don’t Comply?
The EU doesn’t send warnings. They audit. In 2024, the EU’s VAT Information Exchange System (VIES) flagged over 12,000 non-compliant digital sellers. Many were small creators who thought, “I’m just one person, they won’t notice.”
Penalties vary by country. In Germany, you could face a fine of up to €50,000. In France, you could be blocked from selling until you pay back taxes plus 10% interest. And if you’re using a platform like Teachable or Thinkific, they may freeze your payouts until you resolve the issue.
It’s not just money. It’s reputation. Students in the EU are becoming more aware of tax compliance. If your course checkout doesn’t show VAT clearly, they’ll question your legitimacy.
How to Stay Compliant Without a Tax Accountant
You don’t need to hire an accountant. But you do need a system.
- Choose a platform that auto-collects EU VAT and B2B exemptions (Thinkific or Teachable).
- Register for the EU OSS portal (free, at ec.europa.eu/taxation_customs/oss).
- Verify your business details: legal name, address, VAT ID (if you have one).
- Enable automatic tax collection in your platform settings.
- Export your monthly tax reports and keep them for 10 years.
- Check your revenue thresholds in non-EU countries (like Australia’s $75,000 AUD annual limit).
Set a calendar reminder: every quarter, log into your OSS portal and confirm your filing status. It takes 15 minutes. Skipping it is how people get fined.
What About Non-EU Countries?
The EU isn’t alone. Australia charges GST on digital services over $75,000 AUD/year. Canada charges GST/HST. Brazil charges ISS on digital services. Japan charges Consumption Tax.
Thinkific handles most of these. Teachable handles Australia and the UK. Podia and Kajabi? Not so much.
If you’re selling to more than three countries outside the EU, consider using a tax automation service like Avalara, TaxJar, or Quaderno. They plug into your course platform and handle global tax rules automatically. Costs $50-$150/month, but saves you hours-and potential fines.
Final Checklist: Are You Compliant?
- Do you know where your students live? (Use platform location detection)
- Are you charging the correct VAT rate for each EU country?
- Do you accept VAT IDs for B2B sales and exempt those transactions?
- Have you registered for the EU OSS portal?
- Are you exporting tax reports monthly?
- Do you know your revenue thresholds in Australia, Canada, and Japan?
- Is your platform auto-collecting taxes-or are you doing it manually?
If you answered “no” to any of these, you’re at risk. The EU isn’t going away. Tax authorities are getting smarter. And students? They’re paying attention.
Do I need to charge VAT if I’m based outside the EU?
Yes. If you sell digital courses to private customers in the EU, you must charge VAT based on their country-even if you’re in New Zealand, the U.S., or Australia. The EU treats digital sellers the same, no matter where they’re based.
Can I avoid VAT by offering courses for free?
No. If you later monetize the course-even by adding a paid upgrade or upsell-you must start charging VAT on all future sales. Free courses don’t reset your tax obligations. The EU looks at your overall business activity, not individual transactions.
What if my student is a business with a VAT ID?
You don’t charge VAT. But you must verify their VAT ID using the EU’s VIES system and keep a record of it. Platforms like Thinkific and Teachific let you enter VAT IDs during checkout and auto-exempt the sale. If your platform doesn’t support this, you risk charging VAT incorrectly-which is a compliance violation.
Do I need to register for VAT in each EU country?
No. The EU’s One Stop Shop (OSS) lets you register once in your home country and file one quarterly return covering all EU sales. You don’t need separate registrations in Germany, France, or Italy. Just make sure you’re using the OSS portal, not the old MOSS system.
What happens if I sell to the EU but don’t collect VAT?
You could face fines, back taxes with interest, and payment holds from your course platform. In severe cases, your bank or payment processor may freeze your funds. The EU has automated systems that flag non-compliant sellers-especially those with high sales volumes. Ignoring it is risky.
Comments
Anand Pandit
Just wanted to say this is one of the clearest breakdowns of EU VAT I’ve seen in ages. I was sweating bullets about Teachable not handling Australia, but now I know I need to upgrade to Thinkific or pair it with TaxJar. Seriously, thank you for the checklist at the end - printed it out.