COVID-19 dashed the dreams of millions of students who had hoped to study for their degrees at universities at home or abroad. Instead, many have had to stay home and use distance learning to attend their classes. As a result, educational institutions would benefit from carefully considering the commercial and tax implications of a virtual model because they could be in for a real surprise. Particularly on the question of whether virtual learning falls within the Goods and Services Tax/Value Added Tax (GST/VAT) definition of “Electronically Supplied Services” (ESS) and, if it does as can often be the case, this can incur tax obligations for educational institutions in many countries.
Even when there are fewer restrictions to movement in 2021, it is likely that this distant learning model for education will continue to grow so it behoves institutions to understand the detail of the GST/VAT rules.
Source: PwC
