{"id":991577,"date":"2026-07-21T13:35:32","date_gmt":"2026-07-21T13:35:32","guid":{"rendered":"https:\/\/www.taxdesk.com\/?p=991577"},"modified":"2026-08-05T09:14:52","modified_gmt":"2026-08-05T09:14:52","slug":"selling-courses-across-borders","status":"publish","type":"post","link":"https:\/\/www.taxdesk.com\/es\/selling-courses-across-borders\/","title":{"rendered":"Selling courses across borders: the VAT obligation that starts at sale one\u00a0"},"content":{"rendered":"
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The cross-border distance learning market is growing at 20 per cent a year. For every platform and course creator\u00a0benefiting\u00a0from that growth, there is an indirect tax obligation they may not know exists.<\/span><\/i>\u00a0<\/span><\/p>\n

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Distance learning has become one of the most genuinely global digital businesses. A course creator in London can publish a programme on Tuesday and have paying students in Mumbai,\u00a0S\u00e3o Paulo\u00a0and Toronto by Thursday. A platform based in Austin can generate 47 per cent of its revenue from consumers it has never met and who live in countries it has no physical presence in. That is not a hypothetical \u2014 it is the position Coursera reported in its 2024 annual filing.<\/span>\u00a0<\/span><\/p>\n

The commercial story is well understood. The tax story less so. Every one of those cross-border sales creates an indirect tax obligation in the consumer’s country. In\u00a0many\u00a0jurisdictions, the obligation exists from the first sale.\u00a0<\/span>\u00a0<\/span><\/p>\n

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A market growing faster than its compliance infrastructure<\/span><\/b>\u00a0<\/span><\/p>\n

The total global e-learning market sits somewhere between USD 259 billion and USD 370 billion\u00a0covering\u00a0corporate training, institutional\u00a0spending\u00a0and consumer sales.\u00a0The market is large, growing quickly and internationalising fast.<\/span>\u00a0<\/span><\/p>\n

The segment that matters most for indirect tax purposes is narrower: paid courses sold by a provider in one country to a consumer in another.\u00a0Predictions put\u00a0cross-border consumer e-learning segment at USD 14.3 billion in 2024, growing at 20 per cent a year and projected to reach USD 35 billion by 2032. That growth rate is materially higher than the broader market, driven by the globalisation of both content supply and consumer demand.<\/span>\u00a0<\/span><\/p>\n

Coursera generated USD 695 million in revenue in 2024. Almost half of that came from learners outside the United States. Udemy,\u00a0Skillshare,\u00a0MasterClass\u00a0and their equivalents\u00a0are similar: the consumer for a course published in California is as likely to be in\u00a0Bangalore\u00a0or Berlin as in Boston.<\/span>\u00a0<\/span><\/p>\n

Creator platforms have amplified this dynamic. Teachable,\u00a0Kajabi,\u00a0Thinkific\u00a0and\u00a0Gumroad\u00a0have made it possible for an individual expert\u00a0such as\u00a0a fitness coach, a software\u00a0developer\u00a0or\u00a0a language tutor to publish a course available in 150 countries without any institutional support. This is genuinely democratising. It has also created a large and growing cohort of cross-border digital sellers who have no idea that they\u00a0acquired\u00a0VAT obligations in the EU, the UK and Australia\u00a0with their growing sales.\u00a0<\/span>\u00a0<\/span><\/p>\n

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Where the growth is coming from<\/span><\/b>\u00a0<\/span><\/p>\n

Six forces are driving the market’s\u00a0expansion\u00a0and they are structural rather than cyclical.\u00a0The most significant in volume terms is mobile-first adoption in emerging markets. In India, Southeast Asia, Sub-Saharan Africa and Latin America, the smartphone is the primary computing device for hundreds of millions of potential learners. Falling device costs, cheaper data and improving 4G and 5G coverage are creating consumer populations who are\u00a0simultaneously coming online for the first time and actively seeking access to skills and education content that was previously inaccessible to them. The platforms capturing this demand are generating cross-border revenue flows at scale in markets with live indirect tax obligations.<\/span>\u00a0<\/span><\/p>\n

Artificial intelligence is the second major driver\u00a0as\u00a0AI-powered translation and localisation tools have dramatically reduced the cost of making a course available in 20 or more languages. A course that previously required a significant translation investment to reach a Spanish-speaking or Hindi-speaking market can now be localised in days. This removes a major barrier to internationalisation and is increasing the number of sellers generating cross-border sales obligations.<\/span>\u00a0<\/span><\/p>\n

The creator economy has changed the supply side permanently. The shift from employer-funded to\u00a0individually-funded\u00a0professional development is changing the demand side. A finance professional purchasing a CFA preparation course on their personal card, a developer buying an AI skills programme out of their own pocket, a marketing manager signing up for a copywriting certificate are all consumer purchases with B2C indirect tax consequences, regardless of how work-related the subject matter is. And digital credential recognition by employers has made consumers willing to spend USD 500 to USD 2,000 or more on a single professional certificate, materially increasing the average transaction value and the corresponding tax base.<\/span>\u00a0<\/span><\/p>\n

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Three markets, three compliance profiles<\/span><\/b>\u00a0<\/span><\/p>\n

Not all distance learning businesses face the same compliance picture. The market splits into three segments:\u00a0academic, professional development and personal development; the\u00a0indirect tax risk profile differs across each of them.<\/span>\u00a0<\/span><\/p>\n

Academic<\/span><\/b>\u00a0<\/span><\/p>\n

Academic courses leading to a recognised qualification\u00a0such as\u00a0university degrees\u00a0or\u00a0certified professional programmes\u00a0can\u00a0command the highest transaction values and carry the most institutional weight. A single online degree programme can generate USD 10,000 to USD 30,000 or more from a single consumer over its duration. Demand is concentrated among learners in India, Southeast Asia, Africa and Latin America\u00a0seeking\u00a0internationally recognised qualifications from UK, US and Australian institutions without the cost and visa complexity of physical relocation.<\/span>\u00a0<\/span><\/p>\n

The compliance picture for academic providers is complicated by the question of educational exemption. In some\u00a0jurisdictions, courses supplied by recognised educational institutions qualify for VAT or GST exemption. In others, the exemption depends on the institution’s legal structure, non-profit status and how the supply is characterised. The exemption is not automatic and is not universal,\u00a0it does not\u00a0even\u00a0apply consistently across all 27 EU member states, it applies narrowly under UK VAT\u00a0rules\u00a0and it does not exist at all in many other markets. A platform\u00a0operating\u00a0under a revenue-sharing model with a university is\u00a0not the same as\u00a0the university itself and will\u00a0generally not\u00a0qualify for any exemption the institution might otherwise enjoy.<\/span>\u00a0<\/span><\/p>\n

Professional development<\/span><\/b>\u00a0<\/span><\/p>\n

Professional development is the largest segment by cross-border consumer revenue, estimated at around 40 per cent of the total. It is also where the most significant classification risk sits.<\/span>\u00a0<\/span><\/p>\n

The issue is the boundary between B2B and B2C. A purchase made by an individual on their own card, for their own career advancement, without providing a business VAT number at\u00a0checkout, is a B2C supply. It does not matter that the course is about accounting, project\u00a0management\u00a0or data science. Without a verified business identifier from the buyer, the transaction is B2C and the seller must account for output tax in the buyer’s\u00a0jurisdiction.<\/span>\u00a0<\/span><\/p>\n

Platforms selling professional development courses typically have a mixed customer base: some buyers are individuals acting as consumers, some are employees whose employers are effectively reimbursing them, some are genuine corporate purchases that were not routed correctly through a business account. In the absence of VAT number verification at checkout, all of them must be treated as B2C. Platforms that have not built VAT number collection and verification into their checkout flow are routinely under-declaring output tax as a result.<\/span>\u00a0<\/span><\/p>\n

Personal development<\/span><\/b>\u00a0<\/span><\/p>\n

Personal\u00a0development\u00a0\u00a0such\u00a0as\u00a0wellness, creative arts, language learning,\u00a0cooking\u00a0or\u00a0fitness is the highest-volume segment by transaction count. Average transaction values are lower, typically USD 25 to USD 150 per course or USD 10 to USD 30 per month for subscription platforms. But volume is high and geographic reach is extensive.<\/span>\u00a0<\/span><\/p>\n

This is the segment with the densest population of individual creator businesses. A yoga instructor with 3,000 subscribers across 40 countries, a watercolour teacher whose\u00a0Skillshare\u00a0courses have been watched in 80\u00a0jurisdictions, a language tutor who has built a direct Teachable store after years on a marketplace. These\u00a0are the businesses generating the most acute compliance exposure. They typically have no finance team, no tax adviser with digital economy\u00a0expertise\u00a0and no awareness that their international sales are taxable in each buyer’s country.<\/span>\u00a0<\/span><\/p>\n

The migration from marketplace to direct-to-consumer platform is the trigger point that creates the obligation. A creator selling through Udemy is\u00a0largely insulated: Udemy acts as a marketplace facilitator and collects VAT on the instructor’s behalf in most\u00a0jurisdictions. The moment that same creator moves to their own Teachable or\u00a0Kajabi\u00a0store, they become the seller. Every cross-border sale they make from that point onwards creates a potential VAT obligation in the buyer’s country.\u00a0<\/span>\u00a0<\/span><\/p>\n

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What the tax rules\u00a0actually require<\/span><\/b>\u00a0<\/span><\/p>\n

The fundamental principle is destination-based taxation. VAT,\u00a0GST\u00a0and digital services taxes are due in the country where the consumer is\u00a0located, not where the seller is based. A course provider headquartered in the British Virgin Islands selling to consumers in France, Germany and Australia has VAT and GST obligations in each of those countries\u00a0when they reach the relevant threshold. Its own\u00a0jurisdiction\u00a0is, for indirect tax purposes,\u00a0largely irrelevant.<\/span>\u00a0<\/span><\/p>\n

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The EU: the most consequential single environment<\/span><\/b>\u00a0<\/span><\/p>\n

The European Union is the most important indirect tax\u00a0jurisdiction\u00a0for most cross-border course sellers, both because of the size of the consumer market and because of the sophistication and enforcement intensity of the regulatory framework.<\/span>\u00a0<\/span><\/p>\n

Non-EU sellers,\u00a0including UK, US, Australian and all other non-EU businesses,\u00a0must register for Non-Union OSS from their first B2C digital service sale into the EU. There is\u00a0no\u00a0de minimis for non-EU sellers. Registration is\u00a0required\u00a0before any EU consumer sale is made. The OSS scheme then allows a single quarterly return to cover all 27 member states, with\u00a0VAT charged at each consumer’s applicable member state rate\u00a0which ranges\u00a0from 17 per cent in Luxembourg to 27 per cent in Hungary.<\/span>\u00a0<\/span><\/p>\n

A critical change came into effect on 1 January 2025. Previously, live online courses delivered by a human instructor were not classified as electronically supplied services and were taxed at the supplier’s location. From 2025, the EU brought live online services within the ESS regime. Live courses are now taxed where the EU consumer\u00a0resides. Providers of live courses who had not registered for OSS on the basis that their delivery model excluded them from ESS rules now have an obligation they may be unaware of.<\/span>\u00a0<\/span><\/p>\n

The classification question\u00a0around\u00a0automated digital service or human-delivered educational service\u00a0remains\u00a0the most consequential technical determination for any EU-facing course provider. A pre-recorded, fully automated course is straightforwardly an ESS. A course that combines recorded modules with periodic live group sessions requires a mixed supply analysis. A one-to-one live tutoring session delivered by a human instructor may still qualify for exemption in some member states.\u00a0Applying the wrong rate, claiming exemption that does not apply or\u00a0failing to register\u00a0at all\u00a0is the most common compliance failure mode in this sector.<\/span>\u00a0<\/span><\/p>\n

The UK<\/span><\/b>\u00a0<\/span><\/p>\n

Since Brexit, UK VAT\u00a0operates\u00a0entirely independently of the EU OSS framework. Non-UK businesses selling digital services to UK consumers must register separately for UK VAT once their UK taxable turnover exceeds GBP 90,000 in any 12-month rolling period. UK VAT at 20 per cent applies to pre-recorded digital courses. UK HMRC has a dedicated digital economy compliance team and actively pursues non-registered foreign digital service providers.<\/span>\u00a0<\/span><\/p>\n

One\u00a0important difference\u00a0from the post-2025 EU position: HMRC still classifies live online courses delivered by a human instructor as educational services rather than electronic services, meaning they are taxed at the supplier’s location rather than the\u00a0consumer’s. A non-UK supplier of live courses to UK consumers does not currently charge UK VAT on those supplies. This creates a temporary divergence from EU rules that adds complexity for businesses\u00a0operating\u00a0across both markets.<\/span>\u00a0<\/span><\/p>\n

Australia,\u00a0New Zealand\u00a0and Canada<\/span><\/b>\u00a0<\/span><\/p>\n

Australia\u00a0requires\u00a0non-resident suppliers of digital products to Australian consumers to register for GST at 10 per cent once they exceed AUD 75,000 in annual Australian revenue. New Zealand has an equivalent regime at 15 per cent above NZD 60,000. Canada requires registration for GST and HST where annual Canadian revenues exceed CAD 30,000, with\u00a0additional\u00a0provincial layers adding further complexity.<\/span>\u00a0<\/span><\/p>\n

All three countries\u00a0operate\u00a0marketplace facilitator rules that shift the VAT obligation to the platform for sales made through major marketplaces. Direct-to-consumer sellers on their own websites cannot rely on these rules and must register independently.<\/span>\u00a0<\/span><\/p>\n

The United States<\/span><\/b>\u00a0<\/span><\/p>\n

There is no federal digital services tax in the United States. Sales tax is a state-level matter and the rules for digital goods vary significantly. Following the Supreme Court’s 2018 decision in South Dakota v Wayfair, states can require out-of-state sellers to collect sales tax based on economic nexus.\u00a0\u00a0This is\u00a0typically USD 100,000 in annual in-state revenue. Illinois enacted specific taxation on online courses effective 1 January 2025. The broader trend since 2025 has been consistently towards expanding the taxability of digital goods as states modernise tax codes that were drafted before digital commerce existed.<\/span>\u00a0<\/span><\/p>\n

For course sellers using major platforms, marketplace facilitator laws in most states transfer the collection obligation to the platform. For direct-to-consumer sellers, there is no such relief and nexus must be assessed state by state as subscriber volumes grow.<\/span>\u00a0<\/span><\/p>\n

India, Asia-Pacific and the Gulf<\/span><\/b>\u00a0<\/span><\/p>\n

India charges GST at 18 per cent on digital services supplied to Indian consumers by non-resident providers. Japan charges consumption tax at 10 per cent above a JPY 10 million annual threshold. South Korea applies VAT at 10 per cent with registration\u00a0required\u00a0regardless of turnover. The UAE charges VAT at 5 per cent and Saudi Arabia at 15 per cent. Each of these markets has its own registration process, filing currency and compliance calendar.<\/span>\u00a0<\/span><\/p>\n

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The compliance problems that are specific to distance learning<\/span><\/b>\u00a0<\/span><\/p>\n

Several compliance challenges are unique to this sector or are significantly amplified by its characteristics.<\/span>\u00a0<\/span><\/p>\n

Live vs automated: the classification that changes everything<\/span><\/b>\u00a0<\/span><\/p>\n

Whether a course is an automated electronic service or a human-delivered educational service\u00a0determines\u00a0place of supply rules, exemption eligibility and which simplification schemes are available. The distinction is not always obvious. A course that starts as a series of pre-recorded modules and includes a weekly live Q&A session with the instructor may need to be analysed as a mixed supply. A certification programme with automated content and a proctored live examination creates\u00a0similar questions. The answer\u00a0determines\u00a0whether OSS can be used, which VAT rate applies and whether any educational exemption might be in scope.<\/span>\u00a0<\/span><\/p>\n

Most distance learning businesses have not done this analysis systematically and are applying a single VAT treatment to a product portfolio that may\u00a0contain\u00a0several different supply types.<\/span>\u00a0<\/span><\/p>\n

Bundled and mixed supplies<\/span><\/b>\u00a0<\/span><\/p>\n

Courses are\u00a0frequently\u00a0sold as bundles: recorded content plus live coaching calls, a certificate programme plus access to a software tool, a subscription that includes both on-demand video and community membership. Each element may have a different VAT\u00a0treatment\u00a0and the combination may require a principal supply analysis to\u00a0determine\u00a0how the whole should be taxed. Platforms and creators who have not thought through the VAT treatment of their bundles are routinely applying inconsistent or incorrect rates.<\/span>\u00a0<\/span><\/p>\n

Buyer location evidence<\/span><\/b>\u00a0<\/span><\/p>\n

EU rules require two non-contradictory pieces of evidence to\u00a0establish\u00a0a consumer’s member state of residence: IP address, billing address, bank card\u00a0country\u00a0and telephone country code are all accepted. For low-value impulse purchases made via mobile, collecting and\u00a0retaining\u00a0this evidence chain at the point of sale requires deliberate system design. A consumer using a French bank card whose IP address routes through a VPN based in Germany creates a conflicting evidence problem that the billing system must have a rule for handling. Most do not.<\/span>\u00a0<\/span><\/p>\n

The creator economy registration gap<\/span><\/b>\u00a0<\/span><\/p>\n

The compliance gap is most acute among individual course creators. A wellness coach who has built a direct-to-consumer Teachable store and has 80 EU subscribers has exceeded\u00a0the Non-Union OSS threshold and technically owes VAT across all 27 EU member states. They\u00a0almost certainly\u00a0do not know this.\u00a0<\/span>\u00a0<\/span><\/p>\n

Historical exposure<\/span><\/b>\u00a0<\/span><\/p>\n

For businesses that discover non-compliance retrospectively, the question of how to manage years of undeclared VAT is significant. Voluntary disclosure mechanisms exist in most\u00a0jurisdictions\u00a0and typically attract reduced penalties, but they require careful management. A course platform that has been selling to EU consumers for three years without OSS registration faces a substantial back-tax liability across 27 member states.\u00a0<\/span>\u00a0<\/span><\/p>\n

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What good compliance looks like in practice<\/span><\/b>\u00a0<\/span><\/p>\n

Getting to a good compliance position requires working through several questions in sequence.<\/span>\u00a0<\/span><\/p>\n