Where Are Your Services Taxable? (EU and Non-EU Clients Explained)

If you sell online courses from Portugal, one of the most frequent and technically sensitive questions is:

• Do I charge Portuguese VAT?

• What happens with EU customers?

• What about clients outside the EU?

• Is there reverse charge?

• Do I need OSS registration?

The answer depends on three critical variables:

1. Is your client a business (B2B) or a private individual (B2C)?

2. Is the client in Portugal, another EU country, or outside the EU?

3. Are your courses automated (recorded) or live (real-time teaching)?

This distinction is decisive under Portuguese VAT law.

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Step 1 – Are Your Online Courses “Electronically Supplied Services”?

Under EU VAT rules (transposed into the Portuguese VAT Code – CIVA), there is a fundamental distinction:

1. Recorded / Automated Courses

If your course:

• Is pre-recorded

• Is delivered automatically

• Requires minimal human intervention

Then it qualifies as an electronically supplied service.

2. Live Online Courses (Real-Time Teaching)

If:

• A teacher is delivering the session live

• There is substantial human interaction

• It resembles traditional teaching via digital means

Then it is not considered an electronically supplied service.

This classification changes the VAT place-of-supply rules.

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B2B – Selling to Businesses (Portugal, EU or Non-EU)

1. Portuguese Business Clients

If your client is VAT-registered in Portugal:

• The service is taxable in Portugal

• You charge Portuguese VAT at the standard rate (23% mainland)

• Exception: possible education exemption (see below)

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2. EU Business Clients (Valid VIES Number)

If your client:

• Is VAT-registered in another EU Member State

• Has a valid VAT number confirmed in VIES

Then:

• The service is NOT taxed in Portugal

• Reverse charge applies

• The client accounts for VAT in their country

Invoice must state:
“VAT – Reverse charge (Article 6(6)(a) CIVA)”

You must:

• Report in field 7 of the VAT return

• Submit the recapitulative statement

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3. Non-EU Business Clients

If the client is established outside the EU:

• The service is not subject to Portuguese VAT

• Reverse charge applies (outside scope in Portugal)

• VAT is accounted for in the client’s country (if applicable)

You must obtain proof of business status (tax number or equivalent).

Reported in field 8 of the VAT return.

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B2C – Selling to Private Individuals

This is where the rules diverge significantly.

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A. Recorded / Automated Courses (Electronically Supplied Services)

1. Portuguese Private Clients

• Taxable in Portugal

• 23% VAT applies (unless exemption applies)

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2. Private Clients in Other EU Countries

Special rule applies.

If ALL conditions are met:

• You are established only in Portugal

• Total cross-border EU B2C electronic services are below €10,000 per year

• You do not opt for OSS

Then:

• Portuguese VAT applies

If the €10,000 threshold is exceeded:

• VAT must be charged at the rate of the customer’s country

• You must either register in that country OR

• Use the OSS (One Stop Shop) scheme

OSS allows you to:

• Declare all EU VAT through Portugal

• Avoid multiple VAT registrations

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3. Private Clients Outside the EU

For electronically supplied services:

• Not taxable in Portugal

• Invoice marked “Not subject – Article 6(9)(h) CIVA”

• However, check local tax obligations in the customer’s country

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B. Live Online Courses (Real-Time Teaching)

These are treated differently from automated digital content.

1. Private Clients Outside the EU

• Not taxable in Portugal

• Invoice marked “Not subject – Article 6(9)(i) CIVA”

Unless effective use and enjoyment occurs in Portugal (rare in digital context).

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2. Private Clients in Other EU Countries

Live teaching services:

• Taxable where the customer is located

• No €10,000 threshold applies

• VAT must be charged at the customer’s country rate

You must either:

• Register locally in each country, OR

• Use OSS

OSS is typically the most efficient solution.

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Education VAT Exemptions – Do They Apply?

Portuguese VAT law provides exemptions for:

• Teaching services supplied by recognized educational institutions

• Professional training delivered by certified entities

• Certain individual teaching services

However, exemption depends on:

• Legal recognition status

• Certification

• Nature of the training

Most private commercial online course platforms do not automatically qualify.

A detailed case-by-case analysis is required.

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Special “Use and Enjoyment” Rule

Even if services are supplied to non-EU customers, Portugal may still tax them if:

• The effective use occurs in Portugal

• Specific infrastructure conditions are met

This rule prevents artificial non-taxation structures, but it rarely applies in standard digital course scenarios.

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Summary Matrix

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Why This Matters

Incorrect VAT treatment may result in:

• Retroactive VAT assessments

• Penalties

• OSS compliance failures

• Cross-border audit exposure

Digital businesses and online educators are increasingly scrutinized.

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How GoalSeek Supports Online Businesses

We assist with:

• VAT classification of online services

• OSS registration and compliance

• Cross-border VAT structuring

• EU threshold monitoring

• Education exemption analysis

• VAT return alignment

If you operate an online course platform or digital education business from Portugal, proper VAT structuring is essential from day one.

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Need a VAT Review?

If you would like a technical assessment of your specific situation, please contact us with:

• Description of your course format (recorded vs live)

• Client geography breakdown

• Estimated EU B2C turnover

• VAT registration status

We will provide a structured VAT positioning analysis aligned with Portuguese and EU VAT legislation.

Cross-border VAT errors are preventable — when addressed proactively.