KOR (Small Business VAT Scheme)

Key Takeaways

The KOR (kleineondernemersregeling) exempts small businesses from charging and filing VAT if annual revenue is below €20,000.
Under KOR, you do not charge VAT, do not file VAT returns, and cannot reclaim input VAT.
You must stay in the KOR for at least 3 calendar years.
The KOR is beneficial if your clients are primarily consumers (B2C) and your business expenses are low.
It is usually not beneficial if your clients are businesses (B2B), because they can reclaim VAT anyway.

What Is the KOR?

kleineondernemersregeling

The KOR is a simplified VAT scheme designed for small entrepreneurs. If you qualify and opt in:

You do not charge VAT on your invoices
You do not file quarterly VAT returns
You cannot reclaim VAT on your business purchases (input VAT)

The scheme reduces your administrative burden significantly. Instead of filing 4 VAT returns per year, you file zero.

Eligibility

Requirement	Details
Revenue threshold	Annual revenue (omzet) must be below €20,000 (excluding VAT)
Business type	Available to all entrepreneurs: eenmanszaak, VOF, BV, stichting, vereniging
EU establishment	You must be established in the Netherlands
VAT registration	You must have a BTW number (you register for VAT first, then opt into KOR)

The €20,000 threshold is based on your total revenue from taxable supplies. Revenue from VAT-exempt activities does not count toward the threshold.

Good to know

The KOR is optional. You are never required to use it, even if your revenue is below €20,000. You can choose to stay in the normal VAT system and continue charging and reclaiming VAT.

How to Apply

Submit a request to the Belastingdienst (you can do this through Mijn Belastingdienst Zakelijk or by letter)
Specify the start date (must be the first day of a new quarter: January 1, April 1, July 1, or October 1)
Submit the request at least 4 weeks before the desired start date
The Belastingdienst confirms your KOR status

Starting a New Business

If you register a new business at the KVK and expect revenue below €20,000 in your first year, you can apply for KOR immediately. Include the request with your initial BTW registration.

The 3-Year Commitment

Once you opt into the KOR, you must stay in it for at least 3 calendar years. You cannot leave voluntarily before this period ends.

The 3-year period starts on the first day of the quarter you enter the KOR. If you start on April 1, 2026, you must remain until at least March 31, 2029.

Exceptions:

If your revenue exceeds €20,000 during a calendar year, you are automatically removed from the KOR. The removal takes effect from the date you exceeded the threshold.
If you deregister your business, the KOR ends.

Warning

If you exceed the €20,000 threshold, you must start charging VAT immediately — from the invoice that pushes you over the limit. You also need to start filing quarterly VAT returns again. The Belastingdienst does not send a warning — it is your responsibility to monitor your revenue.

When KOR Makes Sense

Good Fit: B2C Freelancers With Low Expenses

Factor	Situation
Clients	Mostly consumers (private individuals)
Revenue	Comfortably below €20,000/year
Expenses	Low business expenses (under ~€2,000/year)
Administration	You want minimal paperwork

Why it works: Consumers cannot reclaim VAT, so not charging VAT makes your services cheaper for them. Your services effectively become 21% less expensive, which can be a competitive advantage.

Poor Fit: B2B Freelancers

Factor	Situation
Clients	Mostly businesses
Revenue	Close to €20,000/year
Expenses	Significant business purchases
Growth plans	You expect to grow beyond €20,000

Why it does not work: Business clients reclaim the VAT you charge, so VAT is cost-neutral for them. With KOR, you save them nothing — but you lose the ability to reclaim your own input VAT.

Financial Comparison

Example: B2C Photographer, €15,000 Revenue, €2,000 in Expenses

With Normal VAT:

	Amount
Revenue to clients	€15,000 + €3,150 VAT = €18,150
Expenses paid	€2,000 + €420 VAT = €2,420
VAT to pay to Belastingdienst	€3,150 − €420 = €2,730
Net revenue	€15,000

Client pays: €18,150

With KOR:

	Amount
Revenue to clients	€15,000 (no VAT)
Expenses paid	€2,000 + €420 VAT = €2,420 (cannot reclaim €420)
VAT to pay to Belastingdienst	€0
Net revenue	€15,000 − €420 = €14,580

Client pays: €15,000

Result: Your client saves €3,150. You lose €420 in non-reclaimable VAT. If the lower price helps you win more clients, KOR can still be a net positive. But purely financially, the KOR costs you €420 per year in this example.

Example: B2B Consultant, €18,000 Revenue, €3,000 in Expenses

With Normal VAT:

Client pays: €18,000 + €3,780 VAT = €21,780 (client reclaims the €3,780)
You reclaim: €630 input VAT on expenses
Net revenue: €18,000

With KOR:

Client pays: €18,000 (no VAT — but client would have reclaimed it anyway)
You cannot reclaim: €630 input VAT on expenses
Net revenue: €18,000 − €630 = €17,370

Result: KOR costs you €630/year with zero benefit to your client. For B2B, KOR almost never makes sense.

Tip

The key question is: Who are your clients? If they are consumers who cannot reclaim VAT, KOR makes your prices more competitive. If they are businesses who reclaim VAT anyway, KOR just costs you money.

Invoicing Under KOR

Your invoices under KOR must:

Not show a separate VAT amount
Not include your BTW-id (some guidance suggests still including it, but the standard practice is to omit it)
Include a statement that KOR applies. Common text: "BTW verlegd op grond van de kleineondernemersregeling" or simply "KOR van toepassing — geen BTW berekend"

You still include your KVK number and other standard invoice details.

EU Cross-Border Under KOR

The KOR has limitations for cross-border transactions:

EU services received: If you purchase services from EU businesses, you may still need to reverse-charge the VAT and file a special VAT return for those specific transactions — even while in the KOR
EU services provided: When providing services to businesses in other EU countries, the reverse-charge mechanism applies regardless of KOR status

These rules can create administrative complexity that partially negates the simplicity benefit of KOR. If you regularly deal with EU cross-border transactions, KOR may not simplify things as much as you expect.

Leaving the KOR

Voluntary Exit (After 3 Years)

After the 3-year commitment period, you can leave the KOR:

Notify the Belastingdienst at least 4 weeks before the start of the next quarter
You re-enter the normal VAT system from the start of the next quarter
You start charging VAT and filing returns again

Forced Exit (Exceeding €20,000)

If your revenue exceeds €20,000 during a year:

You must start charging VAT from the invoice that exceeds the threshold
You must register for normal VAT returns
You cannot re-enter the KOR for at least 3 years

Common Mistakes

Choosing KOR because you want to avoid administration — Administration is a valid consideration, but the financial impact matters more. Run the numbers.
Using KOR with business clients — For B2B, KOR is almost always a net cost with no benefit to the client.
Not monitoring the €20,000 threshold — If you go over, you must act immediately. Set up a tracking system.
Forgetting about non-reclaimable VAT on large purchases — If you are planning a big purchase (new laptop, camera, equipment), the lost VAT reclaim under KOR can be significant.
Not considering growth — If you expect to cross €20,000 within the next year or two, entering KOR may not be worth the disruption of switching back.