Can I sell products online without having a business?
Yes, but there's an important caveat!
Many dream of selling their own creations, flea market finds, or imported goods online. The good news is: Yes, you can in principle sell products online without having a business number and a VAT-registered business. But it's crucial to understand the difference between a private activity (often called a 'hobby business') and a commercial business.
Tax authorities distinguish between these two, and the rules for taxation, deductions, and VAT are widely different. It's very much about your intention with selling and how regular the activity is.
What is a 'hobby business' or private sales?
An activity is considered a 'hobby business' or private sales when it:
- Doesn't have the purpose of creating profit (e.g., only covers costs).
- Is irregular and non-systematic (e.g., a couple of sales per year).
- Typically is based on your personal interest and leisure time.
- Often involves selling private belongings or small production for own consumption, where any sale is a byproduct.
If your activity falls under this category, you don't need a business number or to be VAT-registered. However, the income must still be reported to tax authorities as personal income, and you can't deduct expenses connected with the activity.
When does your hobby become a real business?
Your activity changes status from hobby to commercial business as soon as it has a commercial intention. This means you have the purpose of achieving a profit, and the activity is organized and regular. Signs that your activity is commercial include:
- Regular sales.
- Purchase of goods with the intention of resale.
- Marketing of your products.
- Desire to achieve a profit.
- The scope of sales is significant.
When your activity is considered commercial, you must register a business with a business number. If your revenue exceeds a threshold within a period of 12 consecutive months, you must also register for VAT.
How to get started as a private person (before you start a business)
If you start small and are unsure whether your activity will develop into a full-fledged business, you can absolutely start as a private person. Here are some tips:
- Keep track of income: Note all sales so you can easily report your income to tax authorities.
- Simple payment: Start with mobile payments or bank transfer.
- Sell online: Use social media, online marketplaces, or a simple online store. With a platform like GoShup.com, you can easily create an online store and start selling, even before you have a business number, thanks to the built-in payment solution and focus on user-friendliness.
- No deductions: Remember that as a private person, you can't deduct expenses in your hobby business.
Overview: Hobby business vs. Commercial business
| Criterion | Hobby business (Private sales) | Commercial business |
|---|---|---|
| Intention | Not primarily profit, often covering costs. | To achieve profit. |
| Regularity | Irregular, sporadic. | Regular, systematic. |
| Business number | No, not required. | Yes, required. |
| VAT registration | No, never. | Yes, if revenue > threshold/12 months. |
| Taxation | Income reported as personal income. | Business profit is taxed. |
| Deduction for expenses | No, generally no deductions. | Yes, all relevant business expenses. |
Important considerations and next steps
It's always your responsibility to ensure you comply with applicable rules. If your sales activity begins to increase in scope, or if your intention changes from hobby to business, it's crucial that you react and register your business correctly.
- Keep an eye on revenue: If you're approaching the threshold in revenue within 12 months, it's time to think about VAT registration.
- Assess your intention continuously: Is it still just a hobby, or is it now a real business?
- Seek professional advice: If you're unsure, it's always a good idea to contact an accountant or tax authorities to get tailored advice for your specific situation.
Starting to sell online as a private person is a good way to test the waters. But be prepared to take the step to a formal business when your success grows!