EU VAT for online courses: One Stop Shop (OSS) and the EUR 10,000 threshold

Important notice: this article is a general, educational explanation of EU rules. It is not tax or legal advice and does not take your situation into account. National rules, thresholds and tax authority positions change. Before you sell, consult a tax advisor who knows your country and your type of activity.

If you sell online training to people in several EU countries, VAT stops being a minor formality. The country where tax is due, the rate and the way you report it all change, and the outcome depends on what exactly you are selling. This article explains the general framework with official sources and points out where the classification can vary. The numerical examples are hypothetical.

What counts as electronically supplied services

EU law speaks of telecommunications, broadcasting and electronically supplied services (TBE). According to Implementing Regulation 282/2011, Article 7, as reproduced in the Commission's explanatory notes, these are services delivered over the internet or an electronic network whose nature makes their supply essentially automated, involving minimal human intervention, and impossible to ensure without information technology. The Spanish tax agency (Agencia Tributaria) gives the same definition on its page about telecommunications and electronic services.

The legal basis is Directive 2006/112/EC on VAT and Implementing Regulation (EU) 282/2011, both listed by the European Commission as the reference legislation of the One Stop Shop.

Where a sale to a private individual is taxed: the consumer's country

For electronic services sold to final consumers (B2C), the general rule is that the place of taxation is the customer's country, wherever the supplier is established. The Commission's notes on the 2015 changes explain this. In other words, the VAT that applies is that of the Member State where the student is established, has a permanent address or usually resides, with its rate and its rules.

How do you know where your customer is? The same notes say that, when no specific presumption applies, the customer is presumed to be at the place the supplier identifies on the basis of two items of non-contradictory evidence, and that the regulation gives a non-exhaustive list of such evidence (for example the billing address or bank details). Keep that information for every sale.

The EUR 10,000 threshold

Since 1 July 2021 there is a single annual threshold for the whole EU. According to the Commission's explanatory notes (July 2026 edition), if the supplier is established in only one Member State and the total of its electronic services to consumers in other Member States (plus its distance sales of goods) does not exceed EUR 10,000, excluding VAT, in the current and the preceding calendar year, those sales are taxed like domestic ones. The Commission summarises that this threshold replaced the former country-by-country thresholds.

Three important points, all from the same source:

• Using it is optional. You can choose to apply the general rules (VAT of the customer's country) from the start and register in the One Stop Shop even if you are under the threshold. In that case, according to the notes, you are bound by that choice for two calendar years.
• Once you exceed it, from that moment you are taxed in each customer's country.
• It only covers electronic services and distance sales of goods. It does not cover other services, suppliers with establishments in more than one Member State, or suppliers not established in the EU.

Hypothetical example: an instructor established in Spain sells a recorded course to private individuals in France and Portugal. If the year's total is EUR 6,000 (excluding VAT) and the previous year was also below EUR 10,000, Spanish VAT would apply. If in October the total reaches EUR 12,000, from then on she must apply French or Portuguese VAT depending on each student's country. The notes add that the revised edition includes changes applicable from 1 January 2027 (for example, registering for the Union scheme means giving up the threshold), so check the version in force on your sale date.

The One Stop Shop (OSS): a single return

If you had to apply each country's VAT, you would in principle have to register in each of them. The One Stop Shop (OSS) avoids that: you register in one Member State and declare and pay there the VAT due in all the others. It is optional, according to the Commission's registration page, which also explains that the Union scheme is for businesses established in the EU and the non-Union scheme for those that are not.

How it works, according to the Commission:

• The return is quarterly and must be filed even if there were no supplies (a nil return). It is due by the end of the month following the quarter: 30 April, 31 July, 31 October and 31 January.
• It is made out in a single currency, generally the euro, and the total is paid to the Member State of identification, which distributes it to the others.
• Later corrections go into a subsequent return, within three years of the date the original return had to be filed.
• Records are kept for 10 years from the end of the year of the transaction, including the information used to establish where the customer is.

In the normal case registration takes effect from the first day of the quarter following your notification, according to the registration page. If you start selling earlier, it can apply from the first supply provided you notify before the tenth day of the following month.

In Spain

The Agencia Tributaria states that form 035 is used to declare the start, change or end of operations under the one-stop-shop regimes, and that form 369 is the self-assessment to be used by taxable persons whose Member State of identification is Spain. The form 369 procedure is filed electronically. The exact deadlines and requirements in your case, including how it relates to your national returns, are a question for your advisor.

If you sell to businesses (B2B)

With customers who are businesses or professionals, the rule changes. The Commission's notes explain that services between businesses are taxed where the business customer is established (Article 44 of the Directive) and that, if the customer is a taxable person established in another Member State, the supplier should not charge VAT because the customer accounts for it under the reverse charge.

That requires knowing whether your customer is a business or a consumer. According to the same notes, the supplier must determine that status; if the customer does not provide a VAT number and there are doubts, you can treat the customer as a non-taxable person until one is provided, and you must correct the assessment if the customer later communicates a VAT number. These notes are guidance and not legally binding, as they state themselves.

Recorded course versus live training or 1:1 sessions

This is where most care is needed, because not everything sold online is an electronic service.

• Recorded course with automated access. The regulation's annex includes automated distance teaching that depends on the internet and requires limited or no human intervention, including virtual classrooms, except where the internet is used simply as a tool for communication between teacher and student. It also mentions workbooks completed online and marked automatically. The Agencia Tributaria reproduces this inclusion.
• Training delivered by a teacher. The same regulation expressly excludes teaching services where the course content is delivered by a teacher over the internet or an electronic network (via a remote link). A live class by video call or an individual mentoring session would, in principle, fall under that exclusion according to the Commission and the Agencia Tributaria.

The practical consequence, according to the Commission's e-commerce notes, is that the EUR 10,000 threshold does not cover training services that are not electronic. Their example deals with training carried out physically in other countries, and offers two routes: register in each State where it is provided, or use the Union scheme. How the place of taxation is determined for a live online class sold to a private individual depends on the applicable rule and its national implementation: those notes do not settle it for that case.

What follows is an inference, not a written rule: mixed products (a recorded course with tutoring, a membership with community and live classes, a programme with video plus 1:1 sessions) may require a component-by-component analysis, or a single overall classification, and the answer can vary by country and tax authority. We have also not analysed whether your training could be exempt in some State, which depends on national law and on who delivers it. Ask your advisor how to classify each product before setting prices.

Invoicing: the basics

According to the Commission's notes, the Directive does not impose an invoicing obligation for services to consumers in the EU, but Member States may require one; if you issue an invoice, the invoicing rules of the Member State of identification apply (if you use the Union scheme) or those of the Member State where the supply takes place (if you do not). Ask your advisor how to document sales to businesses under the reverse charge.

If you sell from outside the EU

The EU rules described here (including the non-Union scheme) may still apply to your sales to EU consumers, according to the Commission. Your own country's taxes are a separate matter for a local advisor.

Checklist before you sell

1. Classify each product: recorded course, live, 1:1, or a mix.
2. Decide whether you rely on the EUR 10,000 threshold or register in the One Stop Shop from day one.
3. Keep two items of evidence of each private customer's location and the VAT number of each business customer.
4. Set a quarterly calendar and keep records for 10 years.

LearnSuite

LearnSuite lets you set up an online academy with recorded courses, 1:1 sessions and Stripe payments, by subscription or one-off payment per course. How each product is treated for VAT is a decision to take with your tax advisor.

Reminder: this is general information, not tax advice. Consult a tax advisor before you decide.