How does the small businesses scheme work?

  • Jelle van der Walle
  • The basis
  • 2 December 2024
  • Edited 24 December 2024
  • 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.

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. You can apply for the KOR (in Dutch) via the Belastingdienst (Netherlands Tax Administration). Does your turnover exceed €20,000? Then you must immediately deregister (in Dutch) from the KOR.

Is the KOR interesting for you?

Taking part in the KOR is not the best choice for every entrepreneur as it also has some disadvantages. So look carefully at what it means for your situation (in Dutch). Participation in the KOR can be unfavourable if, for example:

  • You pay more VAT on your expenses than you receive from your customers. Normally, you then get this difference back from the Tax Administration. With the KOR, you cannot reclaim the VAT you paid 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.
  • You are going to make large investments. Perhaps you want to make a large business investment, for example in expensive equipment or a car. Then the KOR may not be right for you, because you cannot reclaim the VAT on these expenses.

Changes as from 2025

From 1 January 2025, several things will change with the KOR:

  • Before 2025, you had to take part in the KOR for 3 years. That will no longer be necessary, so you can opt out earlier. Also, you no longer have to wait 3 years to register for the KOR again.
  • The threshold for small entrepreneurs (in Dutch) who do not have to register with KVK and automatically take part in the KOR rises from €1,800 to €2,200 per year. 
  • You can also use the KOR in other EU countries, if your total annual turnover in the EU stays below €100,000. Take a good look at all the conditions  for taking part in the EU-KOR. This is especially interesting if you also do business in other countries.

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

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