How does the small businesses scheme work?

  • KVK Editors
  • The basis
  • Edited 6 February 2026
  • 1 min
  • Starting
  • Finance

Do you expect to earn less than €20,000 per year with your business? If so, you may be able to make use of the small businesses scheme, the KOR. With this scheme, you do not have to pay VAT. Whether taking part in the KOR benefits you depends on your personal situation.

What do you need to arrange when starting a business?

Answer the questions on Business.gov.nl and see the steps that are important in your situation.

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You can use the KOR if your annual turnover excluding VAT is less than €20,000. Turnover is the amount you receive from selling or supplying your products or services. This is different from your profit, because profit is the amount that remains after you have deducted your costs and expenses. 

KOR and turnover tax (VAT)

The kleineondernemersregeling (KOR) only affects VAT (turnover tax). You still pay other types of tax, such as income tax. When participating in the KOR, you no longer pay VAT, but you cannot reclaim VAT either. You can use the KOR if your annual turnover is less than €20,000.

Advantages of the KOR

Participating in the KOR has several advantages. Here are the main ones.

  • You do not charge VAT on your products or services. So you keep more money left over, ultimately making more profit. Or you choose to lower your prices, making it more attractive to do business with you.
  • Less administration. You do not have to submit quarterly VAT returns and your administration becomes easier.
  • No invoices. You no longer have to send invoices, but you can still do so.

Is the KOR of interest to you?

Not every entrepreneur benefits from participating in the KOR. It also has a number of disadvantages. Participating in the KOR can be disadvantageous if:

  • you pay more VAT on your expenses than you receive from your customers. If you file VAT returns, the Tax Administration refunds the amount of VAT you have paid more than you have received. With the KOR, you can no longer reclaim this VAT on your expenses. This leaves you with less money.
  • you have many business customers. These customers cannot deduct VAT, which makes it less attractive for them to do business with you if you keep the price at the same level as it was before including VAT.
  • you are going to make big investments. Maybe you want to invest a lot in your business, for example with expensive equipment or a car. Then participating in the KOR may be less advantageous, because you cannot reclaim VAT on these large expenses.

Before you apply, make sure you meet the conditions. You can apply for the KOR (in Dutch) via the Belastingdienst (Netherlands Tax Administration). If you want to cancel your KOR participation (in Dutch), you do this yourself.

Advice about the KOR

Do you still find it difficult to decide whether taking part in the KOR is a good idea for you? Someone from the KVK Advice Team will be happy to help.

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