Key takeaways
- As a webshop you usually charge VAT (21% or 9%) and pay it.
- Keep your administration and invoices tidy from day one.
- Separate VAT rules apply to sales abroad.
- Good invoicing and accounting prevent problems with the tax authorities.
For many starters, VAT sounds like the most boring and scariest part of starting an online store. But the principle is simple: you charge VAT to your customers, you pay it to the tax authorities, and you deduct the VAT you pay on purchases yourself. If you understand that, you understand 80% of the VAT.
This guide explains it calmly for someone who is just starting out: are you liable for VAT, what rates apply, how do you file a tax return, and when is the small business scheme smart?
> This is a general explanation, not tax advice. For your specific situation, consult your accountant or the tax authorities.
Are you liable for VAT?
Yes, as soon as you have registered as an entrepreneur and are selling on a structural basis. You will then receive a VAT number. You can read whether you need to register in do you need a Chamber of Commerce for a webshop. Being liable for VAT is not a problem — it is just part of doing business, and you also get a benefit in return (reclaiming the VAT on your purchases).
Which VAT rates apply?
| Rate | What for (examples) |
|---|---|
| 21% | the general rate, for most products |
| 9% | reduced rate: including foodstuffs, books, certain services |
| 0% / exempt | specific cases, such as deliveries abroad under certain conditions |
Check which rate applies to your products — that determines how much VAT is included in your price.
How do you include VAT in your price?
You always show consumers the price including VAT. Do the math backwards to find out your own turnover. An example at 21%:
| Item | Amount |
|---|---|
| Sales price incl. VAT | € 30,00 |
| VAT part (21/121) | € 5,21 |
| Your turnover excl. VAT | € 24,79 |
That €5.21 is not yours — you set it aside for the tax authorities.
Reporting: the rhythm
You usually file a VAT return quarterly. Simply put: you add up how much VAT your customers paid you, and then subtract the VAT that you paid yourself on your purchases and costs. You pay the difference or you get it back.
Practical tip: put the VAT you receive immediately in a separate pot or account. Then it will still be there when the declaration comes, and you will never be faced with a nasty surprise.
The small business scheme (KOR)
If you expect little turnover (below the annual limit), you can opt for the KOR. Then:
- you do not charge VAT to your customers;
- you do not file a VAT return;
- you are not allowed to reclaim the VAT on your purchases.
When is that smart? If you mainly sell to private individuals and purchase or invest little, you keep your prices low and your administration simple. When exactly not? If you purchase or invest a lot (in stock, a laptop, equipment), you will miss out on the VAT refund. Calculate it or ask your accountant.
Reclaim VAT on your purchases
If you buy stock, packaging material or assets, you will be charged VAT that you can reclaim (outside the KOR) via your tax return. That's why it's important to keep all your purchase invoices — every invoice is worth money.
Do you also sell across the border?
If you sell to private individuals in other EU countries, you will have to deal with the VAT rules of your customer's country above a certain amount. There is a separate EU regulation for this that makes this easier. If you're just starting out and you mainly sell within the Netherlands, this isn't your biggest concern yet — keep it in the back of your mind as you grow internationally, and your accountant will help you with it as soon as it arises.
Keep track of your administration from day one
- Keep all sales and purchase invoices (retention obligation: seven years).
- Make sure that your webshop creates neat invoices with your VAT number.
- Export your sales data to your accounting, so that reporting is a matter of an overview.
A platform that automatically creates and exports invoices saves you work every quarter. You can read more about the business side in administration for your webshop as a self-employed person.
Frequently asked questions
Do I have to charge VAT from the first sale?
Yes, unless you choose the KOR. Charge VAT on your sales price and set it aside for your tax return.
How often do I file a tax return?
Usually quarterly. The Tax Authorities will let you know which rhythm applies to you.
What is the difference between 21% and 9%?
The rate depends on the product. Most items fall under 21%; food and books often below 9%.
Is the KOR useful for me?
Often yes, with little turnover and few purchases. If you invest or purchase a lot, it is better to continue to charge VAT and reclaim it. Ask your accountant.
Can I get VAT back on my purchases?
Yes, outside the KOR. Save all your purchase invoices for this purpose; You settle the VAT on this in your tax return.
What if I sell internationally?
Above a certain amount of EU sales, the VAT rules of your customer's country apply. There is a separate EU regulation for this. This is not yet a priority for a starter who mainly sells in the Netherlands; keep an eye on growth and ask your accountant.
Get started
Charge the correct VAT in your prices, consciously choose whether or not to use KOR, and set up your invoicing and a separate VAT fund. If you start at the beginning, go through the complete step-by-step plan to start an online store.
Further reading
do you need a Chamber of Commerce for an online store?
