Do I need to charge tax?

If you use Thinkific Payments, Thinkific will automatically calculate, collect, and remit taxes on all qualifying student purchases made in the United States and Canada. You also have an option to enable VAT calculation on sales made to students in the UK and the EU.

Sales to Students Located in the US and Canada

New tax laws required by states and provinces in the United States and Canada obligate Thinkific and other web platforms like ours to take on the responsibility of ensuring the collection and remittance of sales tax to the relevant tax authority on behalf of marketplace sellers (in our case, Creators). As a result, Thinkific is required by law to ensure that sales tax is collected and remitted on behalf of our Creators for sales made in these jurisdictions.

The main reason for this requirement is to promote fair competition in the online marketplace, simplify the sales tax collection process for all parties involved including sellers like you. By taking on the responsibility of collecting and remitting sales taxes on your behalf, Thinkific helps ensure compliance with tax regulations and reduces the administrative burden on you, the Creator, so you no longer have to worry about managing sales tax yourself. You can focus instead on growing your business and engaging your students, while we handle sales taxes for you.

Sales to Students Located in the UK and the EU

For Thinkific customers selling to buyers in Europe and the United Kingdom that opt-in* for charging UK and EU VAT, Thinkific will determine whether VAT should be charged by the seller, or buyer if they are registered for VAT, and automatically calculate and include the correct VAT amount on your products. Your students will be issued with a VAT-compliant receipt, thereby ensuring compliance while streamlining your international tax management—no third-party tools required.

Note that you are still responsible for determining whether you have tax obligations in the UK and the EU and for remitting the charged VAT amount to the correct jurisdiction. Thinkific provides downloadable tax reports to make filing simple for you and your accountant.

*Charging your UK and EU buyers VAT is an optional solution and should be done if you have tax obligations in each jurisdiction where you sell to. To enable Sales Tax on UK/EU sales, see the set-up instructions here.

Learn more about it here: TCommerce: Sales Tax and VAT Solution.

Note on the Tax Obligations

As taxing regulations and standards differ in other countries, we cannot provide a definite answer for each individual case. We suggest reaching out to a local tax expert in order to determine what regulations and practices are currently in place for online businesses in your location.

Quaderno, a third-party tax integration, has a fantastic article about charging sales tax for online courses and the different types of sales tax around the world.

Click here for more information about how to charge tax with Thinkific.