Small business scheme (KOR) in the Netherlands

What is the small business scheme (KOR)?

The small business scheme lets you stop charging VAT on your invoices. The Belastingdienst calls it the small businesses scheme (KOR). In Dutch it is the kleineondernemersregeling, which is where the abbreviation comes from. You can apply for it if your turnover stays under €20,000 a year.¹ You then file no VAT return either.²

There is a price for that. Once you are in, you can no longer reclaim the VAT on your own purchases and investments. That is what turns the exemption into a decision rather than a default.

Take Yusuf. He runs a small one-person business and invoices about €14,000 a year, almost all of it to private customers. Further down we work his year out in full.

Many entrepreneurs read the exemption as a discount on their income tax as well. It only ever touches your VAT.

Who can use the small business scheme?

You can use it if your business turnover stays under €20,000 in a calendar year. The Belastingdienst tests that limit twice: over the year you want to join and over the year before it.¹ Turnover means what you invoice, minus any VAT you charge on top. So Yusuf's €14,000 counts, not the €16,940 his customers pay him including VAT.

Watch what happens to that figure once you are in. You charge no VAT at all, so from then on the full amount you invoice is your turnover.¹ Keep your prices where they were and it is that gross amount that has to stay under €20,000.

The scheme is voluntary and it covers your whole business. If your business runs several activities, the exemption covers all of them at once.²

You apply for it yourself. Your application has to reach the Belastingdienst at least four weeks before the date you want the exemption to start.¹ The exemption then starts at the earliest with your next VAT return period. That period is the quarter or month you file your VAT over.

The €20,000 limit looks at your Dutch turnover. Only sales taxed with Dutch VAT count toward it.¹ Sales taxed in another country stay out of the count.¹ Check those rules before you apply. The Dutch scheme has an EU counterpart with a limit of its own. The table below sets the two side by side. Our page on the Union scheme for e-commerce covers sales to customers abroad.

What do you give up when you join?

You give up the VAT you can reclaim on everything you buy for your business. That covers your materials, your tools and your larger investments. It covers VAT you paid in another EU country too.²

Your paperwork gets lighter in return. You file no VAT return, apart from a few incidental cases. You charge your customers no VAT. If you still issue an invoice, it has to say that the exemption applies. You still keep every purchase invoice in your records.²

Dutch VAT returns may be new to you. Start with our guide on how the VAT return works.

Does the small business scheme pay off for you?

The answer depends on one thing: who your customers are. Private customers cannot reclaim VAT, so the VAT on your invoice is real money to them. Business customers reclaim it, so it costs them nothing.

Yusuf invoices €14,000 excluding VAT and charges €2,940 in VAT on top. All figures use the standard VAT rate of 21 percent and €2,000 of business costs. He reclaims €420 on his own purchases, so he pays €2,520 over to the Belastingdienst each year.

With mostly private customers he can leave his price where it is. His customers pay €16,940 either way, which keeps him under the €20,000 limit. The €2,940 stays with him and he loses only the €420 he used to reclaim. Over the year he is €2,520 better off.

With mostly business customers it works out the other way. They compare on the price excluding VAT, so he has to drop his invoice to €14,000. Nothing is left over. He still loses the €420, so the exemption costs him money. The table below sets both outcomes side by side. Both results are before income tax.

How do you leave the small business scheme?

You can leave the small business scheme at any time. There is no minimum period to sit out. Your exit takes effect on the first day of your next VAT return period. The Belastingdienst needs your notice at least four weeks before that.³

Coming back is slower. Leave voluntarily and you sit out the rest of that calendar year plus the whole year after it. Only then can you rejoin.³

Going over €20,000 during the year ends the exemption on the spot. You charge full VAT on the sale that takes you over the limit. From that moment you charge VAT again and you file VAT returns again.³ Filed a return that now needs putting right? Our page on correcting a VAT return walks through that.

Timing matters most when a big purchase is coming.

Can you use the scheme in other EU countries?

The EU-KOR extends the exemption to other EU countries. It has been running since 1 January 2025. Your total EU turnover has to stay under €100,000 a year, this year and the year before.⁴ That is everything you invoice across the EU, your Dutch turnover included. Turnover in EU countries where you do not use the exemption counts towards it as well.⁴

The EU-KOR adds conditions of its own. Your business has to be established in the Netherlands. Your head office has to sit here, even with branches elsewhere in the EU. Your turnover in each participating country has to stay under that country's own national limit. And you cannot be using the import scheme, the Invoerregeling, at the same time.⁴ That scheme covers VAT on parcels you import from outside the EU. That last rule holds for the Dutch scheme as well.²

What you file changes as well. Instead of a VAT return in each country you send the Belastingdienst a quarterly statement of your EU turnover, the opgaaf kwartaalomzet.⁴

One thing the EU-KOR is not: the One Stop Shop, also called the Union scheme. That scheme covers cross-border e-commerce and has its own thresholds and its own return. Our page on the Union scheme for e-commerce sets out how that one works.

Our advisor sees the same misreading at this point every time.

What should you do next?

Start with two things of your own: your turnover and your customer mix. Planning a large purchase? That usually tips the balance against joining.

Two things are worth checking before you decide. The first is your VAT basics. Our guide on how VAT and the VAT return work covers those. The second is your income tax, because the exemption leaves that untouched. Our page on income tax for the self-employed explains what still applies. The page on the self-employed deduction (zelfstandigenaftrek) shows which reliefs you can still claim. For Yusuf the answer was yes, because his customers are private.

What we do for business owners is on our page about tax advice for entrepreneurs.