The Value Added Tax (VAT) is a form of consumption tax, which is applied to purchases of goods or services and other ‘taxable supplies in the European Union. In Canada and India, Goods and Services Tax - GST - is applied. Your LearnWorlds school, taxes are not automatically applied when a user purchases a product from the built-in Payment Gateway integrations. The total payable amount is always the price set in your course, bundle, or subscription pricing settings.
Pricing and Taxes in your online courses
If you will always be charging at the same rate, the best option is to include tax directly within your School's invoice settings, and this will be the same for all the products and orders. You can also edit the Tax message in invoices, to let your users know that all your prices are tax inclusive.
If your customers are from the EU, you will need to charge the VAT and pay it to the respective tax authorities. Nevertheless, there are some examples where you may choose not to display VAT for your online courses. For example, for orders from customers who are located within the EU, taxes may not be applicable if your online courses include live interactions, such as one-on-one live sessions. For more information, you can check the below links from gov.uk and European Commission:
- VAT rules for supplies of digital services to consumers
- VAT for electronically supplied services in the EU
If you still need to calculate and charge taxes for your courses, there are a few options to consider!
Quaderno and LearnWorlds
Quaderno is a sales tax calculating tool that sends automatic tax receipts and creates sales tax return-ready reports in a matter of seconds. As an invoice application, it makes the taxation process and EU VAT compliance rules simpler and easy to understand. If you proceed with the Quaderno Integration, you will need to connect Stripe as your Payment Gateway, available in the Pro Trainer plan and above, and let us know in order to disable the built-in invoices of the platform. It’s ideal to use this option if you want to offer subscriptions and installments in your school. For more information, you can check our article here.
Shopify and LearnWorlds
If you would like to offer only one-off payment courses and bundles to your users, with Shopify, you are able to handle the VAT of EU customers since it has geolocation so the VAT in the invoices will be issued automatically according to the country of your customer. Shopify is offered as a built-in integration, and you can check this article for more information, and the following Shopify link for tax information.
External Payment Checkouts
Apart from Quaderno, you can also use an external payment checkout for your courses that supports your tax requirements. Some popular solutions are:
If you proceed with receiving the payment externally, as soon as you confirm the incoming payment, you can manually enroll the user in your Products or you can automate the process via Zapier (available in the Pro Trainer plan or higher) or our API (available in the Learning Center plan or higher).