Small Businesses Scheme Netherlands (KOR) for Startups

4 minuten leestijd

Laatst bijgewerkt op 13-09-2023

Legal entities in the Netherlands can use the Small Business Scheme, also known as the Kleine Ondernemersregeling (KOR). However, the requirement for this is that your turnover does not exceed €20,000. By taking advantage of the KOR in the Netherlands, you as a business owner are exempt from declaring and filing VAT returns. Read in this article more about what the Small Businesses Scheme is all about, how to apply for it and how to stop it.

On this page:

What is the Small Businesses Scheme (KOR) Netherlands?
Who can apply for the small businesses scheme?
Is the Small Business Scheme beneficial for my company?
How to apply for KOR?
Stopping the KOR: follow these steps

What is the Small Businesses Scheme (KOR) Netherlands?

The KOR is particularly aimed at small business owners, such as start-ups and sole proprietors. The Small Businesses Scheme is an exemption from VAT (‘btw’ in Dutch). So as a natural person or sole proprietor, general partnerships (vof’s) or as a legal person (private limited companies, aka bv’s), you temporarily no longer have to charge VAT to customers. Also, you no longer have to file a VAT-return to the Dutch Tax and Customs Administration (Belastingdienst).

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In short, if you take part in the KOR, you:

Do not have to charge your customers VAT
Do not have to file VAT-returns
Can not deduct VAT on business costs
Can not deduct VAT on investments

Note: Since January 1, 2020, the KOR is a VAT exemption. Before that date, the KOR was a tax reduction. So there have been some changes.

Who can apply for the Dutch Small Businesses Scheme?

Any business owner can choose to apply this exemption scheme, this also includes associations, foundations, private limited companies or general partnerships. Once you accepted to use the Small Businesses Scheme, you do so for a period of three years (or until you exceed a turnover €20,000).

In short, you can use the Small Businesses Scheme if:

Your company is based in the Netherlands
Your turnover does not exceed €20,000 in one calendar year
You are a natural person (natuurlijke persoon), which include:
- Sole proprietors (eenmanszaak)
- General partnerships (vof’s)
- Private limited companies (bv’s)
- Foundations (stichting)
- Associations (vereniging)

Is the Small Business Scheme beneficial for my company?

The KOR can provide many benefits for you, assuming, of course, that you meet the conditions mentioned above. Decide whether the KOR might be interesting for you based on the points below:

Do you have mostly private customers or organizations that cannot offset VAT? If your selling price remains the same as before you used the KOR, your margin will be higher, thus the Small Businesses Scheme will be beneficial for your company.
Instead, do you have mostly b2b customers? If you use the KOR, then you cannot reclaim the VAT on purchases and business expenses, which increases the purchase price. Then the KOR is more likely to be less interesting for your business.
For foreign customers or transactions, you must still file a VAT return. Then the KOR is less interesting for your business.

How to apply for KOR?

Application for the Small Businesses Scheme can only be made through the application form on the Belastingdienst website.

You can apply for the KOR by following these steps:

Make sure you meet the requirements of the KOR.
Navigate to the website Belastingdienst.nl
Follow the menu: Home > Btw (VAT) > Hoe werkt de btw? (How does VAT work?) > Kleineondernemersregeling (Small Businesses Scheme) > Aanmelden (Subscribe).
Complete and submit the form on this page. You can read the PDF with Adobe Reader.
Once your application is received, you will receive a confirmation of receipt within 15 days.

Note: The application form must be received by the Belastingdienst no later than 4 weeks before the effective date of the return period in which you want the KOR to take effect.

Stopping the KOR: follow these steps

Are you already using the Small Businesses Scheme, but do you exceed the turnover limit of € 20,000 per year (excluding VAT)? Then you have to stop the KOR. From now on, you have to apply the regular VAT rules again, which means that you have to charge VAT to customers again and file VAT-returns. In addition, the use of the Small Business Scheme stops after three years.

You can stop the KOR by following these steps:

Navigate to the website Belastingdienst.nl
Follow the menu: Home > Btw (VAT) > Hoe werkt de btw? (How does VAT work?) > Kleineondernemersregeling (Small Businesses Scheme) > Afmelden (Unsubscribe).
Complete and submit the form on this page. You can read the PDF with Adobe Reader.

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Note: If you do not take action, your participation in the KOR will be extended.

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