Making use of the Small Businesses Scheme (KOR)

Turnover-dependent

The KOR is a turnover-related VAT exemption. You are eligible for this exemption if your turnover (excluding VAT) is no higher than €20,000 in a calendar year and in the previous calendar year.

All deliveries and services that are normally taxed with VAT, count towards this amount. You also need to include your VAT-exempt turnover from:

• the supply and rental of immovable property,
• financial services, and
• insurance services.

Turnover from other VAT-exempt services does not count towards the turnover limit. This includes, for instance, medical services, sports services, and services provided by writers and journalists.

Please note: the KOR only applies to turnover tax. You must continue to file a tax return for other taxes, such as income tax, and pay on time.

Voluntary scheme

Any entrepreneur can choose to apply this exemption scheme, regardless of the legal structure. This includes associations and foundations. Under the scheme, you do not charge VAT on your goods and services. Nor may you reclaim any VAT on expenses (input tax). You can keep your accounts simple and you do not have to file a VAT return.

You also do not have to send an invoice, but you are allowed to do so. No VAT percentage or VAT amount can be stated. Instead, the invoice should include the sentence 'factuur vrijgesteld van OB o.g.v. artikel 25 Wet OB' (invoice exempt from VAT under Article 25 of the Turnover Tax Act). If you make use of the KOR you do not need to meet the standard invoice requirements. 

Stop using the KOR

There are 2 moments when you can stop using the KOR: if you exceed the turnover limit for the KOR. Or if you request to stop the KOR yourself. 

Exceeding the €20,000 limit

Have you made more than €20,000 turnover in a calendar year? Then you must end the KOR (in Dutch) and calculate VAT from the first delivery with which you exceed the €20,000 limit. From that moment, you must again keep the normal VAT records and file VAT returns. The turnover before exceeding the limit remains free of VAT. However, in the 3 years that follow, you can no longer make use of the KOR scheme.

Requesting to stop using the KOR yourself

Do you want to quit the KOR yourself? From 2025 onwards, there is no minimum period of participation. Submit your request to the Tax Administration no later than 1 month before the end of the quarter via the online form on Mijn Belastingdienst Zakelijk. After stopping the KOR, you cannot participate again for the rest of the current year plus the following year.

Is the KOR Small Businesses Scheme beneficial for you?

Do you meet the conditions for this scheme? Then it could give you some advantages. You do not have to keep VAT records or file VAT returns. The list below will help you decide whether the Small Businesses Scheme might be interesting for you:

• Are your customers mainly private individuals and organisations that cannot offset VAT? If your selling price remains the same as it was before you made use of the Small Businesses Scheme, your margin will be higher. In this case, the scheme will be interesting for you.
• Do you have many business customers? If you make use of the tax credit under this scheme, you cannot reclaim the VAT on purchases and business expenses. Your 'purchase price' will therefore be higher. To maintain the same margin, you then need to increase your selling price without VAT. This may make your product less interesting to business customers.
• Planning to make a big investment? If you use the KOR, you cannot reclaim the VAT paid. Your investment amount will increase as a result.
• Have you deducted VAT on investments as withholding tax over the past 5 years? If so, you will be faced with a VAT adjustment if the deducted VAT divided by 5 years is more than €500. You must then refund that amount of VAT. For investments in property, the calculation period is 10 years.
• Are you starting a sole proprietorship and you bought solar panels for your home before 2023? Then read this information from the Tax Administration.
• Do you rent out your property subject to VAT? If so, you are not eligible for the Small Businesses Scheme.
• Do you have foreign customers or transactions for which you reverse-charge VAT? Then you must still file a VAT return. Read more about this on the website of the Netherlands Tax Administration (Dutch).

Using the KOR in another EU country

From 2025, you can also use the EU KOR, the small businesses schemes that apply in other EU countries. Your total annual turnover in the EU must remain below €100,000. This is the so-called Union annual turnover threshold. A national turnover threshold also applies to each country. Entrepreneurs from other EU countries can use the Dutch KOR.

Using the Small Businesses Scheme (KOR)

Are you already running a business and would you like to use the Small Businesses Scheme?

Then you need to apply to the Belastingdienst. You can participate in the scheme from the start of each new tax period (usually a quarter). Make sure the Tax Administration receives your application (in Dutch) no later than 4 weeks before the starting date.

Please note: you cannot use the KOR unless you have applied for it, and your application has been accepted by the Belastingdienst. A turnover of less than €20,000 does not automatically mean you are a KOR user.

Are you starting a business soon and would you like to make use of the KOR?

You can only apply for the scheme if you are an entrepreneur and have received a VAT identification number from the Tax Administration. The first possibility to participate in the Small Businesses Scheme is at the start of next quarter. Apply to the Tax Administration no later than 4 weeks before your desired starting date. You must submit your VAT return for the quarters in which you do not yet participate in the Small Businesses Scheme. You can use the Small Businesses Scheme after you get a written confirmation of participation from the Tax Administration.

Turnover less than €2,200 and no KVK registration

Do you have an annual turnover of no more than €2,200 and are you unable to register with the Netherlands Chamber of Commerce KVK? You can still use the KOR (in Dutch). In this case, you do not register as an entrepreneur for VAT and you do not have to report to the Tax Administration. You then make use of the voluntary registration threshold.

You can always decide later to register as an entrepreneur for VAT with the Tax Administration. In any event, you must do so if your annual turnover exceeds €2,200. Check if you must register with KVK. If your turnover is up to €20,000, you can apply for the small businesses scheme.