ETS has confirmed that due to changes in European Union regulations, “VAT must now be applied to tests in the customer’s country of residence” across all 27 EU member states.
The updated regulations will mean higher bills for TOEFL test takers, with those taking the test in Germany paying an additional USD $50.35, those in France an additional $54 and those in Sweden an additional $80, according to the test booking website.
The increase means that TOEFL now costs significantly more than competitors in Europe that don’t appear to have passed on the increased tax to test takers.
In France, for instance, test takers now pay $324 for TOEFL, compared to $269 and $270 for IELTS Academic and PTE Academic respectively, ELT expert Michael Goodine informed The PIE.
“This tax represents a new legal requirement, and we are working diligently to comply with the updated regulations while continuing to provide high-quality testing services,” a spokesperson for ETS told The PIE News.
The new regulations surrounding VAT took effect on January 1, 2025, due to changes in the EU’s Place of Supply (POS) rules relating to certain educational services which are provided virtually. Pre-January 2025, these services had a POS where the supplier belonged, but the new rules put the POS where the customer resides.
The updated regulations are part of the OECD’s ongoing efforts to address ‘base erosion and profit shifting’, where multinationals shift profits to low tax locations causing other countries to lose revenues.
Though there was no official announcement from ETS about the increase, the testing company said it was “actively working to ensure transparency by providing clear explanations of the new law to test takers in the affected markets”.
“We recognise the importance of affordability for our test takers and remain committed to delivering the highest value through our assessments and services,” it said.
Meanwhile, ETS’s operating revenues totalled 1.16 billion last year, up $139 million compared to 2023, according to its recently released 2024 annual audit.
