Running an online business from the Netherlands: tax, KVK and first steps

Short answer: as soon as you earn money online structurally and with the aim of making a profit in the Netherlands, you register with the KVK (Chamber of Commerce) and declare your income to the Tax Authority. You then get a VAT number, usually charge VAT and pay income tax on your profit. A sole proprietorship is the logical legal form for most starters: simple, cheap and quickly arranged. This article lists the practical first steps. It is general information, not tax advice.

When are you officially an entrepreneur?

Not every euro you earn online immediately makes you an entrepreneur. The Tax Authority looks at, among other things, whether you work structurally, aim for profit, have multiple clients and run business risk. If you sell something second-hand once, that is not a business. If you repeatedly deliver services or products with the aim of making a profit, it is.

Rule of thumb: as soon as you notice it is becoming serious and recurring, you arrange your registration and bookkeeping. Waiting until “it is big” only causes hassle with your records later.

Registering with the KVK

You register with the Chamber of Commerce (KVK). For most online starters a sole proprietorship is the logical choice:

• Quick and cheap to set up.
• You arrange everything yourself, without a notary.
• You are liable for debts with your private assets.

When you register, you choose a business name and state what you do (your activities). The KVK passes your details to the Tax Authority, which then sends you a VAT number. A private limited company (BV) usually only becomes interesting at higher profits or if you want to limit liability, and is more expensive to set up.

Which tax do you pay?

As an entrepreneur with a sole proprietorship you mainly deal with two types of tax.

VAT (turnover tax)

On most services and products you charge VAT, usually 21 percent, which you pass on to the Tax Authority. You file VAT returns periodically (often quarterly). VAT you pay on business costs yourself can in many cases be deducted from that. For small entrepreneurs there is the small businesses scheme (KOR), with which you do not have to charge VAT under certain conditions. Whether that is favorable depends on your situation.

Income tax

On your profit (turnover minus business costs) you pay income tax. If you meet the hours criterion and the other conditions, you may be entitled to entrepreneur deductions, such as the self-employed deduction and the SME profit exemption. These lower your taxable profit. The exact rules and amounts change every year, so always check the current situation with the Tax Authority.

Keeping your records in order

Good bookkeeping does not have to be complicated, but it does have to exist. From day one, keep track of:

• All income: invoices you send.
• All business costs: receipts and invoices you pay.
• Your VAT: what you receive and what you can deduct.
• Your hours: useful for the hours criterion and deductions.

Use a separate business account and a simple bookkeeping package. That helps enormously with your returns and prevents mistakes. The Tax Authority requires you to keep your records for several years.

Practical first steps

1. Decide on your earning model. Choose a concrete direction that suits you and start with it. Still unsure? Book a free kickstart call.
2. Test whether there is demand. Deliver your first work or sale, possibly still small, to see if it runs.
3. Register with the KVK as soon as it becomes structural.
4. Arrange your VAT administration and set up a separate business account.
5. Choose a bookkeeping solution and keep everything tidy from the start.
6. Schedule your returns (VAT per period, income tax annually).
7. Set money aside for tax. Reserve part of every invoice so you do not face surprises.

The biggest mistake starters make is wanting to arrange everything perfectly at once before they have earned anything. Start by earning, arrange your registration and bookkeeping as soon as it becomes serious, and bring in an accountant when it grows over your head.

Frequently asked questions

Do I have to register with the KVK right away?

Not if you are still trying things out. As soon as you work structurally and with the aim of making a profit, you register. Do not wait until it is big, or your records will fall behind.

How much tax should I set aside?

That differs per situation. Many starters reserve a substantial part of every invoice for VAT and income tax to be safe. Ask an accountant for a guideline amount that fits you.

Do I need an accountant?

Not required, but when in doubt or when growing, it is wise. An accountant prevents mistakes, finds deductions and saves you time and stress.

Can I run an online business alongside a job or benefits?

Often yes, but rules apply. Alongside a job it can work fine part-time. With benefits you must report your side income. Always check your situation in advance.

Is this article tax advice?

No. This is general information to help you get started. Rules and amounts change every year. For your situation, consult the Tax Authority or an accountant.

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Want to know which online earning model fits you and how to start tidily and honestly? Book the free kickstart call. Also check out all earning models at a glance.