Selling Digital Products from the Netherlands on DAFT

Selling digital products—courses, templates, e-books, software—is one of the most popular business models for Dutch-American Friendship Treaty (DAFT) entrepreneurs. Location-independent income, scalable, and no physical inventory to deal with.

But selling digital products from the Netherlands has specific tax rules that differ from selling services. VAT gets complicated fast, especially when your customers are spread across the US, EU, and beyond.

Here's what we've learned about getting it right.

What Counts as a "Digital Product"?

For Dutch and EU tax purposes, digital products (electronically supplied services) include:

E-books and digital downloads
Online courses and video content
Software and SaaS subscriptions
Templates, presets, and digital tools
Music, images, and stock media
Apps and plugins
Membership site access

What doesn't count: Live coaching calls, custom consulting, and personally delivered services. Those are "services," not digital products, and have different VAT rules.

This distinction matters because VAT on digital products is charged based on where the customer is located, not where you are. Services are generally taxed based on where the supplier is (with exceptions for B2B).

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VAT Rules for Digital Products

This is the part that trips people up. VAT on digital products sold to consumers (B2C) is charged at the customer's country rate, not the Dutch 21% rate.

Selling to consumers in the Netherlands: 21% BTW

Selling to consumers in other EU countries: The VAT rate of that country (ranges from 17-27%)

Selling to consumers outside the EU (US, UK, etc.): 0% VAT

Selling to businesses (B2B) in other EU countries: 0% VAT (reverse charge mechanism)

Selling to businesses outside the EU: 0% VAT

The OSS System (One Stop Shop)

If you sell to consumers across the EU and your cross-border sales exceed €10,000 per year, you must register for the OSS (One Stop Shop) system at the Belastingdienst.

OSS lets you file a single quarterly VAT return covering all EU countries instead of registering for VAT in each country separately. You pay the different VAT rates through one return.

How to register: Through the Belastingdienst website. You'll need your BTW number and DigiD. For details on DigiD, see our DigiD guide for DAFT entrepreneurs.

Filing frequency: Quarterly OSS returns, separate from your regular quarterly BTW return.

Practical Setup: Payment and Tax Collection

You need a payment system that automatically handles VAT collection for different countries. Doing this manually is a nightmare.

Option 1: Stripe + Tax automation

Stripe can collect payments, but you need a tax layer on top:

Stripe Tax: Built-in tax calculation. Automatically determines rates and adds VAT based on customer location. Costs 0.5% per transaction.
Quaderno or Taxjar: Third-party tax automation that integrates with Stripe. From ~€50/month.

Option 2: Merchant of Record (MoR) platforms

These platforms handle everything—payment processing, VAT collection, VAT filing, and customer invoicing. They're the "seller" legally, and you receive a royalty.

Paddle: Popular for SaaS. They handle all tax compliance. Fee: ~5-8% per transaction.
Lemon Squeezy: Great for digital products and courses. Fee: 5% + $0.50.
Gumroad: Simple but higher fees (10%). Limited tax compliance features.

Pro Tip: If your digital product revenue exceeds €10,000 in cross-border EU sales, a Merchant of Record platform is worth the fee just to avoid the headache of OSS filing and multi-country VAT compliance. Below that threshold, Stripe + Stripe Tax works fine.

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Setting Up Your Dutch Business for Digital Sales

KVK registration: Your SBI code should reflect digital product sales. Common codes include 62010 (software development), 58190 (other publishing), or 47919 (retail via internet). The KVK advisor will help you choose. See our KVK registration guide for the full process.

BTW registration: You'll receive your BTW number automatically after KVK registration. If you sell digital products to EU consumers, also register for OSS.

Bookkeeping: Digital product sales require tracking:

Revenue by country (for VAT purposes)
Customer location evidence (IP address, billing address, payment method country—you need two matching pieces of evidence)
VAT collected per country
Platform fees and payment processing costs

For bookkeeping basics, see our bookkeeping requirements guide.

Pricing Your Digital Products

A few considerations specific to selling from the Netherlands:

VAT-inclusive pricing for EU customers: EU consumer protection law requires prices shown to consumers to include VAT. If you show €49 on your sales page, that's what the customer pays—VAT comes out of your revenue.

Currency: Most DAFT entrepreneurs selling globally price in USD. European customers are used to seeing USD prices for digital products, especially from US-origin creators.

Price sensitivity by market: Dutch and European consumers tend to spend less on digital courses and products than US consumers. If you're targeting the EU market, adjust expectations accordingly.

For broader pricing strategy, see our guide on pricing services for the Dutch market.

Income Tax on Digital Product Revenue

All revenue from your digital product sales is taxable in the Netherlands as business income (box 1), regardless of where customers are located.

Your profit (revenue minus expenses) is taxed at the Dutch income tax rates:

Up to ~€38,000: 36.97%
Above ~€38,000: 49.50%

Deductible expenses include:

Platform fees (Stripe, Paddle, etc.)
Software and tools used to create products
Marketing and advertising costs
Professional services (accountant, legal)
Home office deduction (if applicable)

If you meet the hours requirement (1,225 hours/year), you also get the zelfstandigenaftrek (self-employed deduction) and potentially the startersaftrek (starter deduction) in your first three years.

US Tax Obligations

You still file US taxes as a US citizen. Your digital product income is reported on your US return. The Foreign Earned Income Exclusion (FEIE) or Foreign Tax Credit (FTC) prevents double taxation.

FEIE: Exclude up to ~$130,000 of earned income from US tax (2026 amount). Digital product income may or may not qualify depending on how the IRS classifies it—self-employment income generally qualifies, but passive royalty income may not.

FTC: Credit Dutch taxes paid against your US tax liability. This is often more straightforward than FEIE for digital product sellers.

Consult a cross-border tax accountant. This is not a place to guess. For more on your dual tax obligations, see our US-Netherlands tax treaty guide.

Frequently Asked Questions

Q: Do I need a Dutch business to sell digital products, or can I use my US LLC? A: For DAFT purposes, you need a Dutch-registered business (eenmanszaak or BV). You can maintain a US LLC separately, but your DAFT business must be the entity operating in the Netherlands.

Q: What if most of my customers are in the US? A: That's fine and very common for DAFT entrepreneurs. No Dutch VAT on sales to US customers. You just report the revenue on your Dutch tax return as business income.

Q: Do I need to charge sales tax to US customers? A: US sales tax depends on nexus rules in each state. If you no longer have a physical presence in the US, you likely don't have nexus. But if your US LLC is still active or you exceed economic nexus thresholds in certain states, you might. This is a question for your US accountant.

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