Small Business Scheme (KOR) 2025: What Does It Mean for You?

What is the Small Business Scheme (KOR)?

The Small Business Scheme (KOR) is a VAT exemption for small entrepreneurs in the Netherlands with an annual turnover of no more than €20,000. When you participate in the KOR, you do not need to charge VAT to clients, file VAT returns, or reclaim VAT on business costs and investments.

This scheme is attractive for self-employed professionals, sole traders, general partnerships and foundations that want to reduce their administrative burden. But is the KOR also the right choice for you? In this article we explain everything.

Who is the KOR intended for?

You can use the KOR if you meet these conditions:

✔️ Your business is established in the Netherlands.

✔️ Your turnover does not exceed €20,000 per calendar year.

✔️ You supply goods or services that are normally subject to VAT.

✔️ You participate voluntarily and remain in the scheme for at least 3 years, unless your turnover exceeds the threshold.

Note: If your turnover exceeds €20,000 in one calendar year, you must immediately stop participating in the KOR and start filing VAT returns again.

How do you calculate turnover for the KOR?

To determine whether you qualify for the KOR, you look at your turnover excluding VAT. This means:

If you are not yet participating in the KOR, only the net turnover (excluding VAT) counts.

If you are already participating in the KOR, your turnover is the total of all invoices you send.

What turnover counts for the KOR?

✔️ Supplies of goods and services subject to Dutch VAT.
✔️ Certain VAT-exempt turnover, such as medical care and education.

 What does not count? 
❌ VAT on private use of goods and services.
❌ Sale of investment goods.
❌ Domestic transactions where VAT has been reversed to the recipient.

What does participating in the KOR mean for your business?

By participating in the KOR:

You do not charge VAT to clients and do not remit VAT.

You may not reclaim VAT on business costs or investments.

You do not need to file VAT returns, except in exceptional situations.

Invoices with VAT are not required, but you can send an invoice without VAT.

Example:

A hairdresser with a turnover of €19,000 per year chooses the KOR. Their clients are private individuals, so they have no benefit from VAT deduction. Thanks to the KOR they do not need to remit VAT and have less administration.

An accountant with a turnover of €15,000 chooses not to use the KOR, because many of their clients are entrepreneurs who can deduct VAT. For them it makes no difference whether VAT is charged.

KOR and doing business within the EU

Do you do business within the EU? Then special VAT rules apply:
🔹 Selling services or products within the EU? In some cases you may still need to file an incidental VAT return.
🔹 VAT on foreign costs? You cannot reclaim foreign VAT if you participate in the KOR.
Want to know how the KOR relates to the EU-KOR, which allows you to get a VAT exemption in multiple EU countries?
Read here everything about the EU-KOR.

How do you register for the KOR?

📅 Make sure you register at least 4 weeks before your desired start date via Mijn Belastingdienst Zakelijk. You will receive a confirmation of your participation within 6 weeks.

When do you need to deregister from the KOR?

You are required to deregister immediately if your turnover in one calendar year exceeds €20,000. As soon as you exceed this threshold, the VAT exemption lapses immediately and you must charge VAT on the full supply that crosses the threshold.

Example:

On 15 March 2025 you have a turnover of €19,750.

On 1 April you receive an advance payment of €500 for a new assignment.

Your total turnover is now €20,250, which means the KOR lapses immediately.

From 1 April you must charge VAT on the full amount of the new assignment.

How do you deregister from the KOR?

🔹 Mandatory deregistration when your turnover exceeds €20,000.
🔹 Voluntary deregistration is possible, but only takes effect on the first day of a new quarter.
🔹 Deregistration can only be done online via Mijn Belastingdienst Zakelijk (since 1 October 2024).

After deregistration an exclusion period applies: the remainder of the year plus the following calendar year you may not participate again in the KOR. Only after that can you register again.