Small business scheme (KOR): what it is and who can join

What is the KOR?

The small business scheme (kleineondernemersregeling, KOR) is a VAT exemption. If you take part, you do not charge VAT to your customers, you do not file VAT returns and you cannot deduct the VAT on your business costs and investments.

According to the Dutch Tax Administration, sole traders, partnerships of natural persons (such as a vof) and legal entities such as foundations, associations and private limited companies can take part.

Who can take part?

You can join the KOR if you meet the conditions. The turnover limit applies to the calendar year in which you register and to the calendar year before it.

• Your business is established in the Netherlands.
• Your turnover is at most € 20,000 per calendar year.
• The goods or services you supply are subject to VAT.
• As long as you do not yet take part, the VAT you charge does not count towards turnover. Once you take part, the full amounts you charge customers count.
• Some turnover does not count, for example services where the VAT has been reverse-charged to you as the customer. The conditions page of the Tax Administration lists exactly what does and does not count.

The EU-KOR since 2025

Since 1 January 2025, businesses that also trade in other EU countries can take part in the small business scheme in the EU (EU-KOR). You can then receive a VAT exemption for one or more EU countries where you are active.

The EU-KOR has its own conditions, for example a limit of € 100,000 on your total EU turnover per calendar year and turnover limits per country. Different rules apply to trade within the EU, so read the Tax Administration page on the EU-KOR if you have customers in other EU countries.

Take part or not?

Taking part does not pay off for everyone. The Tax Administration itself names a number of points to consider:

• You cannot deduct VAT on business costs and investments. That can be a disadvantage if you receive VAT refunds every year or expect large investments.
• You do not charge VAT to customers. If your customers can deduct VAT, they notice little of the exemption.
• As soon as your turnover in a calendar year exceeds € 20,000, you must deregister immediately.
• After deregistering you cannot choose year by year: you must wait out the rest of the calendar year and the following calendar year.
• With strongly fluctuating turnover, taking part is risky.

Registering

You register for the KOR through Mijn Belastingdienst Zakelijk. According to the Tax Administration, your registration must be received at least four weeks before the start of the VAT return period in which you want to begin. You can only register once you are registered with the Tax Administration as a VAT-liable business.

After processing you receive a letter with the definitive start date. Until then you keep filing VAT returns. Foundations and associations use a separate online form.

What must your invoice say?

As a KOR participant you do not show VAT on your invoices. You do not need to send invoices for VAT purposes, but you may, for example when customers ask. On such an invoice you state that an exemption applies.

The Tax Administration pages we consulted do not prescribe a fixed sentence. An example of a clear wording is: ‘VAT not applicable: exemption under the small business scheme.’ If in doubt, check with the Tax Administration or your adviser.

As a KOR participant you must still keep your purchase invoices.

What if you exceed € 20,000?

As soon as your turnover in one calendar year exceeds € 20,000, you may no longer use the KOR and must deregister immediately. The deregistration takes effect at once. The supply or service that takes you over the limit is no longer exempt: you charge VAT on the full amount.

Want to stop voluntarily while you are below the limit? That is possible with effect from the first day of a VAT return period. Submit the deregistration at least four weeks in advance through Mijn Belastingdienst Zakelijk.

After deregistering you can only rejoin after the exclusion period: the rest of the calendar year in which you deregistered and the following calendar year.

Check whether the KOR suits you

Our KOR check gives you a quick impression of your turnover compared to the limit. It is a tool, not advice: the Tax Administration also has its own tool to determine whether you can take part.

How FactuurPro helps

In FactuurPro you can choose a VAT rate or an exemption per invoice line, for example under the small business scheme. That way your invoice shows no VAT if you may not charge it.