VAT to EU customer for online course in UK

We are running an online training course and a customer is based in Netherlands. I can't determine whether this is classed as exporting the goods as the customer will remain in the Netherlands. Do I need to charge the VAT ? Thanks

Hi,

Online training is classed as a service and if the customer is overseas then there would be no UK VAT to be charged.

However if you are providing a digital service then there could be a requirement to register for VAT in the Netherlands or to register for a Non-Union VAT MOSS scheme in an EU member state.

You can find further guidance here:

VAT rules for supplies of digital services to consumers

Thank you.

I think though that there may be an alternative VAT treatment to that proposed in the first paragraph. The service appears to be a supply of education delivered by a teacher over the internet. If the supply is to a business (guidance can be found in VAT Notice 741a) the service follows the general rule B2B, and the place of supply is where the customer belongs, which is the Netherlands, and so outside the scope of UK VAT (as mentioned above). But if the supply is to a consumer the service follows the general rule B2C, and the place of supply is where the supplier belongs, so subject to UK VAT. The supply does not appear to be one of the exceptions to the general rule – Place of Supply of Services VN 741a, Paragraph 6.4, in particular, B2C Supplies of digital services). See below. This is an extract from the link above (and the same link is at Para 6.4): Services not affected by these rules Using the internet, or some electronic means of communication, just to communicate or facilitate trading does not always mean that a business is supplying e-services. Using the internet for the following does not count: o Educational or professional courses, where the content is delivered by a teacher over the internet or an electronic network (in other words, using a remote link) So you may not need to register for VAT in the Netherlands. If you are sending books (goods) to the Netherlands you can zero rate the export (see https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad)

I will add a further comment. If there is minimal human involvement in the online training then the supply may be one of electronic services (ESS) and if supplied to a consumer that would require registration in NL. If the online training involves teaching by a live tutor it would not be an ESS . That would appear to mean it falls under the general rule for B2C services as PeterVAT says so subject to UK VAT. However HMRC guidance in its place of supply manual at VATPOSS13250 says "educational services where the supplier and the customer are in different countries from each other at the time when the supply is made" are treated as supplied where received when supplied to private consumers. That would make the place of supply in the NL and thus outside the scope of UK VAT. This is apparently, HMRC policy.

I think the supply of "education services" in VATPOSS13250 is an example of consultancy services. The place of supply of consultancy services with reference to education, e.g. examination services, is further explained in the Education Manuel VATEDU45800: "For the purpose of determining where a supply of examination services takes place, the rules relating to consultancy services are applied when the supply is being made to a private individual. ... this means that where the supply of examination services is received by a private individual belonging outside the UK, the supply will be outside the scope of UK VAT. A supply of examination services to a business customer ...the place of supply being where the customer belongs". VATPOSS13250 and VATEDU45800 deal with consultancy services but I believe the supply in emmae's post is one of education "tuition" rather than education "services". In VATPOSS08500, to confirm my understanding, it states: "... where educational services are supplied when the supplier (the tutor) is in one country and the customer is in a different country the supply is not regarded as a where performed service. That is because the supply does not constitute a physical performance ..." So, if the supply is to a consumer the service follows the general rule B2C, and the place of supply is where the supplier belongs, so subject to UK VAT.

[Post amended - Admin]