Filing EU VAT for Transactions on Native Teachable Gateways

Frances Wong

| Dec 04, 2019

Running your own business gives you a lot of flexibility and freedom, but also a lot of added responsibility. While you control your own work hours, you also have to handle all the reporting and accounting that comes with it. That’s why having a strong, reliable payment system is integral to the success of online business owners—and why Teachable has built a dedicated team around payments.

In speaking with Teachable members, we’ve discovered just how many things an online business owner has to juggle—partner payouts, accounting, taxes and more.

As we continue to research and build features to improve our payment gateways, starting January 2nd, 2020, Teachable will be filing EU value-added tax for all transactions on Teachable Payments or Monthly Payment Gateway—regardless of whether you have BackOffice enabled and at no additional charge.

What is VAT?

The European Union Value Added Tax—or VAT for short—is generally charged on purchases made by customers in the EU. VAT applies to any merchant selling a product or service (including digital products like an online course) to a customer based in Europe, regardless of whether that merchant is located in the EU.

Filing EU VAT at Teachable: What does that mean?

Currently, if you’re using one of our payment gateways, Teachable automatically collects VAT on all purchases made from the EU. If you’ve enabled BackOffice, Teachable then remit the collected taxes through the VAT MOSS system every quarter to make sure each appropriate EU tax authority receives the applicable taxes. If BackOffice is disabled or if you’re using other payment gateways, you are responsible for remitting the collected taxes to the EU yourself.

So what’s changing?

If you currently have BackOffice enabled…

Nothing will change. There will be no additional charges for you, and no extra steps are needed. If the only reason you enabled BackOffice is to have us to file your EU VAT, you can disable it in January when this new change takes effect.

Please note that if you disable BackOffice before the change takes effect, you are responsible for filing and remitting any VAT you’ve collected during that period.

If you currently have BackOffice disabled...

You are still responsible for filing and remitting any VAT you’ve collected until January 2nd, 2020. To help clarify which charges you are responsible for, there is a new field under transaction details to indicate which transactions with VAT you need to handle.

If you believe your course is VAT exempt, you now have the option to disable VAT collection without BackOffice enabled.

BackOffice Features

BackOffice will continue to be available to all Teachable members using our native payment gateways. For an additional 2% transaction fee, you can enable BackOffice to have Teachable:

  • Handle all your author and affiliates payouts so you don’t have to do any additional accounting
  • Collect W-8/W9s and file 1099 tax forms for you, your authors, and your affiliates
  • Offer PayPal as an additional payment option for your students

We’re excited to make filing EU VAT easier for all Teachable members using our payment gateways. It’s another step forward in simplifying and supporting your online course business.

Frances Wong is a Product Marketer at Teachable. Outside of Teachable, Frances is an avid sports fan and dedicates her weekends to Manchester United and Georgetown Hoyas games.