The small business scheme (kleineondernemersregeling, KOR) is a VAT exemption for entrepreneurs with turnover of at most €20,000 per calendar year. If you join, you charge no VAT to your customers, deduct no VAT on your costs and file no VAT returns (Belastingdienst, small business scheme).
Whether the KOR is smart depends mostly on who your customers are. If you work for private customers, it can gain you thousands of euros a year. If you work for contractors or invest a lot, it often costs you money.
In short
- You register at least 4 weeks before the start of a quarter, and only if your turnover this year and last year does not exceed €20,000.
- If you pass the limit, you charge VAT from the job that takes you over it. After that you may not rejoin for the rest of that year and the whole next year.
- The KOR pays off with private customers and few purchases. With business customers, reverse-charged VAT in construction or a new van it usually does not.
In this article
- What is the small business scheme (KOR)?
- Which turnover counts towards the €20,000 limit?
- How do you register and deregister, and what has changed since 2025?
- What changes when you join?
- What happens if you go over €20,000 halfway through the year?
- Do you have to repay VAT on your van or tools?
- Who is the KOR smart for, and who is it not?
- Frequently asked questions about the KOR
What is the small business scheme (KOR)?
The KOR is a VAT exemption for small entrepreneurs. You take part only if you choose to. If you do not choose it, the normal VAT rules apply to you, even with low turnover.
You can join if three conditions are met. Your business is established in the Netherlands. Your turnover is at most €20,000 per calendar year, in the year you register and in the year before. And you supply goods or services that are subject to VAT (Belastingdienst, KOR conditions). The scheme is open to sole traders, general partnerships, private limited companies, foundations and associations (Belastingdienst, small business scheme).
This article covers the practical side. What the KOR does to the growth of a business, for example whether entrepreneurs stay below the limit, is covered in the article What does the small business VAT scheme do to the growth of your business?
Which turnover counts towards the €20,000 limit?
Almost all your normal turnover counts, including turnover on which you reverse-charge the VAT. Many subcontractors in construction forget that last point. The tax authority uses the amount excluding VAT while you are not yet in the scheme, and the full invoice amount once you are (Belastingdienst, KOR conditions).
| Counts | Does not count |
|---|---|
| Turnover at 21%, 9% or 0%, including exports | The sale of a business asset, such as your old van |
| Turnover on which you reverse-charge VAT to a Dutch contractor | Private use of business assets |
| Exempt turnover from real estate, financial services and insurance | Turnover taxed abroad |
| Under the margin scheme, the full sale amount | Other exempt turnover |
If you have several VAT sub-numbers under one business, you add up the turnover of all of them. The KOR then applies to all or none of them (Belastingdienst, KOR conditions).
How do you register and deregister, and what has changed since 2025?
You register in Mijn Belastingdienst Zakelijk, at least 4 weeks before the day the KOR is to start. The KOR starts on the first day of a quarter. If you are late, it starts one quarter later (Belastingdienst, registering for the KOR).
- Register by 3 December: the KOR starts on 1 January.
- Register by 3 March: the KOR starts on 1 April.
- Register by 2 June: the KOR starts on 1 July.
- Register by 2 September: the KOR starts on 1 October.
If you are just starting, you must first be registered as a VAT entrepreneur. Wait for the letter with your VAT tax number and VAT identification number, and only then register. Within 8 weeks you receive a letter with the date you join. Until that letter, you keep filing VAT returns as normal (Belastingdienst, registering for the KOR).
Since 1 January 2025 the rules are more flexible. The compulsory 3-year participation has been abolished. You can deregister at any time, at least 4 weeks before the first day of a new filing period (Belastingdienst, deregistering from the KOR). After deregistering you may not rejoin for the rest of that calendar year and the whole following calendar year. So you cannot choose again every year (Belastingdienst, joining or not).
Also since 2025 there is the EU scheme (EU-KOR). With it you can also work without VAT in other EU countries, if your turnover across the whole EU stays at or below €100,000 a year and you stay below each country's own limit. You then report your EU turnover every quarter (Belastingdienst, EU-KOR).
What changes when you join?
You no longer charge VAT, you no longer deduct VAT and you file no VAT returns. You still need your administration. The tax authority lists these consequences (Belastingdienst, what joining means):
- No VAT on your invoices. You do not need to send invoices for VAT purposes. If you do send one, you state that an exemption applies.
- No deduction. The VAT on materials, tools, fuel and your van becomes a cost for you, including VAT you pay in Germany or Belgium.
- No VAT returns. In some cases you must still file an incidental return, for example for certain purchases from abroad. You request it yourself (Belastingdienst, incidental VAT return).
- You still keep records. You keep your purchase invoices, and your records in general for 7 years (Belastingdienst, retention period). You also need those figures for income tax.
- The low motor vehicle tax rate for a business owner's van remains available, if you meet its conditions.
What happens if you go over €20,000 halfway through the year?
Then the KOR stops immediately. You charge VAT on the whole job that takes you over the limit, and from then on the normal VAT rules apply. You must deregister straight away at that moment (Belastingdienst, deregistering from the KOR).
The tax authority's example: an entrepreneur has €19,750 in turnover on 15 September. On 16 September he receives an advance payment of €500. From 16 September the normal rules apply, and VAT is due on the full €500 (Belastingdienst, deregistering from the KOR).
Watch out with advance payments and large jobs in the autumn. A roof renovation or bathroom worth a few thousand euros can take you over the limit in one go. Your quote must then work for both situations, because from that moment the customer pays 21% more if you pass on the VAT. And because the previous year's turnover counts, you cannot join for the whole next year either.
Do you have to repay VAT on your van or tools?
Sometimes, yes. If you deducted VAT on an investment in recent years, you must repay part of it when you join the KOR. That is called revision: the tax authority corrects the deduction afterwards, because you now use the asset for exempt turnover (Belastingdienst, revision and the KOR).
For a business asset such as a van, trailer or scaffold, the revision period is 5 years: the year it is first used and the 4 years after. Each year, 1/5 of the deducted VAT belongs to that year. If the revision in a year is less than €500, you repay nothing for assets from earlier years (Belastingdienst, revision and the KOR).
If you are planning a large purchase, such as a new van, it is often better not to join yet. Under the KOR you cannot reclaim that VAT (Belastingdienst, joining or not).
Who is the KOR smart for, and who is it not?
The KOR is smart if your customers cannot deduct the VAT and you buy little. You then become cheaper or keep more. It is not smart if your customers are businesses that deduct VAT, if you buy a lot of materials or if you are going to invest (Belastingdienst, joining or not).
Research in the United Kingdom shows the same pattern. There, almost half of the businesses below the VAT threshold chose to charge VAT anyway. That was more common among businesses that buy a lot of inputs and sell less to private customers (Liu et al., 2021). The study used tax records of British businesses from 2004 to 2014.
For subcontractors in construction the KOR is rarely favourable. If you work for a contractor, you already reverse-charge the VAT (reverse-charging VAT as a subcontractor). You then pay no VAT over, but you do get the VAT on your purchases back. With the KOR you lose that refund, while the contractor notices nothing. The tax authority itself gives the example of a subcontractor with €15,000 turnover and €1,470 VAT on purchases. She chooses not to join (Belastingdienst, example subcontractor in construction).
Worked example: two tradespeople, two outcomes
This is an example with made-up amounts. Handyman Jeroen works for private customers. His customers pay him €18,000 a year in total, and he buys €2,000 of materials plus €420 VAT. Roofer Sanne works as a subcontractor for contractors and reverse-charges the VAT. She invoices €19,000 and buys €6,000 of materials plus €1,260 VAT. On 1 January 2025 she also bought a van with €4,200 VAT, which she deducted. Both are considering the KOR from 1 January 2027.
| Per year | Handyman, private customers | Roofer, subcontractor |
|---|---|---|
| VAT you pay over without the KOR | €3,124 | €0, reverse-charged |
| VAT on purchases you get back without the KOR | €420 | €1,260 |
| With the KOR: effect per year | €3,124 minus €420 = €2,704 gained | €1,260 lost |
| With the KOR: revision on the van | none | €840 lost in 2027, 2028 and 2029 |
| Outcome in 2027 | €2,704 more left over | €2,100 less left over |
Jeroen keeps his prices the same, because his customers already pay €18,000 including VAT. Without the KOR that contains €3,124 VAT, because €18,000 divided by 1.21 is €14,876 excluding VAT. With the KOR he keeps that amount himself, minus the €420 VAT he no longer gets back. Sanne gains nothing from the KOR. Her contractors deduct the reverse-charged VAT anyway, so she cannot raise her price. She loses the €1,260 refund a year, and repays €840 on her van for 3 years (€4,200 divided by 5).
Frequently asked questions about the KOR
Am I completely done with VAT under the KOR?
No. You no longer file normal VAT returns, but sometimes you must file an incidental return, for example for certain purchases from abroad (Belastingdienst, incidental VAT return). And you keep records.
What is the difference between the KOR and the registration threshold?
The registration threshold applies to entrepreneurs who do not need to register with the Chamber of Commerce and have at most €2,200 turnover a year. They do not need to register as a VAT entrepreneur. If you are registered with the Chamber of Commerce, it does not help you (Belastingdienst, registration threshold).
Can I use the KOR if I have a private limited company?
Yes, if the company meets the conditions. The scheme is open to sole traders, general partnerships, private limited companies, foundations and associations (Belastingdienst, small business scheme).
Can I switch the KOR on and off every year?
No. After deregistering you must wait for the rest of that year and the whole next year. If your turnover fluctuates around €20,000, the tax authority says joining is probably not advisable (Belastingdienst, joining or not).
Will anything change in the KOR in 2027?
The Tax Plan 2027 bill contains no change to the KOR. On 16 October 2026 that bill is not yet law. So check the current rules with the tax authority before you register.
Sources
- Belastingdienst, Small business scheme (KOR), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Conditions for the KOR, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Registering for the KOR, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Deregistering from the KOR, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Joining the small business scheme or not, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Small business scheme in the European Union (EU-KOR), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, What does joining the small business scheme mean?, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Incidental VAT return, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, How long must you keep records?, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Do I have to revise my VAT deduction because of the small business scheme?, accessed 16 October 2026. belastingdienst.nl
- Liu, L., Lockwood, B., Almunia, M. & Tam, E.H.F. (2021). VAT notches, voluntary registration, and bunching: Theory and U.K. evidence. The Review of Economics and Statistics, 103(1), 151-164. doi.org
- Belastingdienst, KOR example: subcontractor in construction, VAT reverse-charged, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Registration threshold for small businesses, accessed 16 October 2026. belastingdienst.nl
- Ministry of Finance, Tax Plan 2027 bill, Budget Day 2026. Accessed 16 October 2026. rijksfinancien.nl