Figuring out VAT for online courses and coaching made me want to cry. I’m not even being dramatic.
I thought it’d be simple: sell digital stuff, pay some tax, done. But nooo. Once I started getting students from different countries? Game over. Everything got messy fast.
And if you’re anything like me — running a small business, coaching part-time, or selling courses on platforms like Kajabi, Teachable, or even your own website — chances are you’ve Googled, “Do I need to charge VAT for my digital course?” at least once. Or ten times.
Let me walk you through what I learned the hard way.
The “Oh Crap” Moment That Started It All
I had this amazing productivity course — just a couple of videos, PDFs, and a workbook. Launched it with a bang, had buyers from the UK, Germany, Australia, and a few U.S. folks. I was pumped! Then someone messaged me: “Hey, do you charge VAT?”
I was like… uh, what?
Turns out, if you’re selling digital products to customers in the EU or UK, you may have to charge VAT based on where your customer is located — not where you live. Yeah, it’s a headache. Especially since it’s not the same across every region.
If you’re not sure how it all works, start by reading this breakdown of EU VAT rules for digital products. It’ll give you a solid foundation to understand why you might be on the hook — even for a tiny online course.
Digital Courses Count as “Electronic Services”
Here’s where it gets spicy. If your course is completely self-paced — meaning no live interaction — it’s often classified as a digital or electronic service. That means in places like the European Union, UK, and even Australia, you might be legally required to charge VAT.
On the other hand, if you offer live coaching calls, personalized feedback, or email support as part of your course? That can be seen as a non-digital service, which may follow different tax rules.
I didn’t know any of this. I was just selling videos and sending PDFs. But the tax office? They definitely knew.
If you’re using platforms like Payhip, they can actually help with this. Here’s a guide on how Payhip automates VAT collection, which honestly saved me hours of trying to do it manually.
Coaching Services vs. Courses: The VAT Split
Let’s break it down real quick:
Online Courses (Self-paced):
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Often treated like digital services.
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Think recorded videos, downloads, and access without any personal interaction.
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Subject to VAT in many countries, especially in the EU.
Live Coaching (1:1 or Group):
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More likely to be treated as a regular service.
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VAT might still apply, but it’s usually based on where you are, or sometimes where the client is — depends on your country’s rules.
And here’s where I nearly lost it — sometimes bundled offers (like a course + coaching) need to be split for VAT. So you’re not just charging a flat price — you’re breaking it down, applying VAT on one part, not on another. Ugh.
What I Did? (And You Probably Should Too)
After my mild tax panic, I hired an accountant who specialized in online businesses. Best decision I ever made.
But if you’re DIY-ing it? Here’s what I’d recommend:
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Register for VAT MOSS (or similar): If you’re in the EU or selling to EU customers, the Mini One Stop Shop (MOSS) system lets you report VAT in one place. The UK has its own version now too. Learn more about how VAT MOSS works for digital sellers.
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Use a Payment Processor That Handles VAT: Platforms like Podia, Teachable, or Gumroad often auto-calculate and collect VAT for you. Just make sure you set it up correctly. I had a setting turned off for months. Oops.
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Clearly Display Prices: In the EU and UK, prices shown to consumers must include VAT. I got a warning email once for not showing “VAT inclusive pricing.” That was fun. This article on how to display VAT on your Payhip store explains how to stay compliant with that.
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Track Customer Locations: You might need to prove where your buyer lives. Some platforms track IP addresses and billing info for you, which helps if you ever get audited.
It’s Confusing, But You’ve Got This
Look — I’m not a tax expert. Just someone who got burned once and decided to figure it out before the government came knocking.
Charging VAT on online courses and coaching is one of those things you can’t ignore, even if it feels like a bureaucratic maze. The rules vary so much by country — and they keep changing — so it’s worth checking with a professional if you’re scaling.
And honestly? Once I got it all set up — VAT rates, MOSS registration, pricing adjustments — it wasn’t that bad. Just annoying up front.
If you want to avoid fines or errors, also check out how to issue VAT-compliant invoices to customers. That’s another piece people miss until it’s too late.
Final Thoughts: Better Safe Than Sorry
If you’re making money from digital products, don’t assume the rules don’t apply to you just because you’re small. VAT laws are catching up to the online world fast. And they’re not super forgiving when you mess up.
Even if you only have a few international customers now, it’s smart to get systems in place early. Automate what you can, track what matters, and get help when you need it.
Trust me, it’s way better than getting that dreaded “You owe back taxes” email.
