EU VAT Reform 2025: The Paradigm Shift for Digital Coaches and Swiss Education Providers

On January 1, 2025, one of the most profound changes in the European value-added tax system of the last decade will come into force, specifically affecting the sector of digital education, live coaching, and virtual events. For Swiss providers, an era of tax advantages is coming to an end.

While the taxation of purely automated digital products has followed the destination principle since 2015, a regulatory grey area existed for interactive, live online formats.

This was based on the historical link to the "place of activity," which enabled providers from third countries like Switzerland in particular to provide services to EU end consumers effectively tax-free. The implementation of Directive (EU) 2022/542 ends this state and harmonizes the rules for determining the place of supply.

At the same time, the concept of the "Deemed Supplier" under Art. 9a of Implementing Regulation (EU) No. 282/2011 is gaining massive importance. Platforms and marketplaces increasingly see themselves forced to assume tax liability to minimize compliance risks.

Part I: The Historical Genesis and the Legislative Turning Point 2025

To understand the scope of the 2025 reforms, an analysis of the previous fragmentation of European VAT law is essential. The system long suffered from the distinction between "automated" and "human" service provision in the digital space.

1.1 Electronic Services (ESS) vs. Live Formats

This category includes services provided over the internet that are essentially automated (e.g., pre-recorded online courses, e-books). Since 2015, the recipient location principle has strictly applied here according to Art. 58 of the VAT Directive.

The Anomaly of "Events" (Live Coaching):

As long as "human intervention" was involved (e.g., live webinar via Zoom, 1:1 consulting), the service did not fall under the definition of ESS. Instead, Art. 54 of the VAT Directive (old version) applied, stating that the place of service is where it is "physically carried out".

The European Court of Justice (ECJ) ruled in the Geelen case (C-568/17) that for an interactive session streamed live, the place of service is where the provider is physically established.

For Swiss coaches, this meant a de facto tax advantage (Double Non-Taxation): A coaching session from Zurich was often not taxable in the EU and tax-exempt in Switzerland as a service export.

1.2 The Turning Point: Directive (EU) 2022/542

Effective January 1, 2025, the EU is closing this loophole. The new paragraph in Article 54 states for services with virtual participation:

"Where these services are supplied to a non-taxable person and involve virtual participation, the place of supply shall be the place where the customer is established, has his permanent address or usually resides."

Implications for Practice:

End of the Place of Activity: It is irrelevant for tax purposes whether the coach is in a studio in Bern or on a beach in Bali.

Equality with ESS: Live webinars and interactive coaching are now treated exactly like automated downloads for tax purposes.

Loss of Competitive Advantage: Third-country providers lose their price advantage over EU providers, as they can no longer invoice "gross for net".

Impact on B2B:

The reform also creates clarity in the B2B sector. The general B2B rule (Reverse Charge) applies, meaning the place of supply is where the recipient business is established. The risk of tax authorities arguing that the service was "physically carried out" at the coach's location is thus eliminated.

Part II: The Construct of the "Deemed Supplier"

The EU Commission has recognized that it is more efficient to tax a few large platforms than millions of small providers.

2.1 Legal Dogmatics: Art. 9a Implementing Regulation and Platform Liability

Article 9a establishes a far-reaching legal presumption: If an electronic service is provided via a telecommunications network, an interface, or a portal (marketplace), it is presumed that this marketplace is acting in its own name but on behalf of the provider.

This splits the turnover into two logical seconds:

Supply 1 (B2B): Coach -> Platform (Usually tax-free/Reverse Charge).

Supply 2 (B2C): Platform -> End Customer (Taxable in the customer's country).

The ECJ confirmed in the Fenix International judgment (C-695/20) that platforms having economic control over the transaction are to be treated as suppliers for tax purposes, even if the Terms and Conditions state they are "only intermediaries."

2.2 The Application Gap for Live Coaching

Here lies the critical point: Art. 9a explicitly refers to "electronically supplied services" (ESS). Live coaching, however, is by definition not ESS due to human interaction.

Nevertheless, many platforms will voluntarily step into the role of the Deemed Supplier from 2025. Since live events are now taxable at the recipient's location, the liability risk for platforms (aiding tax evasion) would be immense if they cannot guarantee correct taxation by every single coach.

Part III: Operational Models – Marketplaces vs. Direct Sales

For Swiss digital coaches, the legal situation results in a fundamental strategic decision between using a "Merchant of Record" or self-management.

3.1 Model A: "Full-Service" Marketplace (Udemy, Skillshare)

Application Art. 9a: Yes, mandatory.

Role: Coach is purely a content supplier.

Tax: Udemy remits VAT worldwide. The Swiss coach receives a net payout (royalty), which is not subject to VAT in Switzerland as a service export.

3.2 Model B: The "SaaS" Trap (Kajabi, Elopage, Teachable)

The situation is most complex for Software-as-a-Service providers.

Kajabi: Often positions itself as a pure technology provider. The coach remains the Merchant of Record and must remit the tax themselves, even if tools like "Kajabi Tax" support calculation.

Teachable: Follows a hybrid approach. With the 2025 reform, Teachable will likely have to enforce or offer the "Reseller Model" for live products as well to avoid tax risks.

3.3 Model C: The "Freelance" Marketplace (Upwork, Fiverr)

Many coaches use these platforms for acquisition. Caution is advised:

Liability Trap: Upwork often states in its T&Cs that the contract exists directly between the freelancer and the client.

Consequence: If a Swiss coach sells to a private customer in France via Upwork, the coach must remit the French tax themselves, even though the payment went through Upwork.

3.4 Model D: Direct Sales (Zoom + a payment provider)

The coach sells via their own website (WordPress, Squarespace) and uses a payment provider for payment processing.

Status: The coach is 100% the supplier. Neither Zoom nor a pure payment provider are marketplaces within the meaning of Art. 9a, as they are pure technical service providers.

Impact: The Swiss coach is fully liable for tax in the EU country of destination. They must determine the customer's location via IP address and billing data for every transaction.

Part IV: Thresholds and Duties (Non-Union OSS)

A widespread misconception concerns the applicability of thresholds for companies from third countries. Within the EU, a turnover threshold of 10,000 euros applies to micro-enterprises. *This does NOT apply to companies exclusively established outside the EU (e.g., Switzerland).

For Swiss coaches, a threshold of 0.00 euros applies. Even the very first sale of a live coaching session for 50 euros to a private individual in the EU triggers a registration obligation.

4.1 The Solution: The Non-Union OSS Procedure

To avoid having to register individually in 27 EU states, Swiss companies can use the "Non-Union One-Stop Shop" (OSS) procedure.

Registration: Takes place in a chosen EU Member State ("Member State of Identification"), e.g., Germany (BZSt) or Ireland (Revenue).

Process: Quarterly reporting of all EU sales and a single transfer to the Member State of Identification.

4.2 Interaction with Swiss VAT

Caution with pricing: If a coach is not yet subject to VAT in Switzerland (turnover < 100,000 CHF) but has customers in the EU, they must still remit tax on EU sales. If prices on the website are stated flatly (e.g., "100 CHF"), the EU tax authorities assume this is the gross amount, which massively squeezes the margin (up to 27% in Hungary).

Read also: VAT and AHV for Self-Employed Coaches in Switzerland: The 2026 Guide

Part VI: Action Recommendations for 2025

Based on the analysis, three concrete strategies emerge for Swiss coaches.

Strategy A: The "Clean Cut" (Reseller Model)

Use of platforms like Digistore24, CopeCart, or bondigoo that act as resellers.

Mechanism: The platform buys the product (B2B) and sells it to the customer (B2C). They act as commission agents under Art. 28 VAT Directive.

Advantage: Complete relief from EU liability and OSS risk.

Price: Higher fees (often 7-10%), but full legal certainty.

Strategy B: The "SaaS" Solution (Self-Administration with OSS)

For coaches who want to control their brand and optimize margins.

Action: Registration for Non-Union OSS before the first transaction in 2025.

Tech Stack: Mandatory implementation of geolocation software in the checkout (e.g., Quaderno) to calculate the correct local tax rate.

Strategy C: B2B Focus

Since the reforms primarily affect B2C, some coaches are repositioning themselves purely for corporate clients.

Advantage: Due to the reverse charge procedure, no VAT applies that the coach must remit. Validating the customer's VAT ID becomes the most important compliance measure.

Conclusion

The year 2025 marks the end of tax "freedom" for virtual live events from third countries. The equalization of live coaching with digital products regarding the place of supply forces Swiss coaches into European tax liability. The "Deemed Supplier" is turning from a theoretical legal construct into an operational necessity for the scalable sale of knowledge in Europe.

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