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The small business scheme (KOR): for whom and for whom not?
Written by Ilias3 min read
The small business scheme, KOR for short, is a VAT exemption for entrepreneurs with limited turnover. If you join, you don't charge VAT and don't have to file VAT returns. Sounds attractive, but it's not advantageous for everyone. This article explains how the KOR works and who it suits.
What is the KOR?
The KOR is a VAT exemption. If you join, you don't charge VAT to your customers and don't remit VAT. In return, you also can't reclaim VAT on your costs and investments. You no longer have to file VAT returns either, which brings administrative calm.
When are you eligible?
You can use the KOR if you have less than 20,000 euros in turnover per calendar year. This is about your turnover, not your profit. If you exceed that 20,000 euros during the year, the scheme ends from that moment and you have to start charging VAT again.
For whom is the KOR advantageous?
The KOR is mainly interesting if your customers are private individuals, since they can't reclaim the VAT anyway. By not charging VAT you're cheaper for them. The scheme suits part-time entrepreneurs, hobby-level side income and starters with little turnover.
For whom is the KOR not useful?
If you mainly work for business customers, the KOR is often not advantageous: they offset the VAT anyway, so your VAT is not a cost for them. In addition, you lose the right to reclaim VAT on your costs. If you make large investments, for example in equipment, that can work out unfavourably. So calculate it carefully in advance.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
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