The small business scheme (KOR): for whom and for whom not?
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
Under the KOR you charge no VAT and file no VAT returns as long as your turnover stays below € 20,000 per calendar year, but you cannot reclaim VAT on costs and investments either.
- Since 2025 your turnover must also have stayed below € 20,000 in the calendar year before you register.
- If you deregister, you can only rejoin after the rest of that calendar year plus the year after it.
- The KOR mainly pays off with private customers and few VAT-bearing costs; rarely with business customers or large investments.
- The KOR only touches VAT: your profit, deductions and income tax return are unaffected.
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, student entrepreneurs 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, and VAT revision comes into play as well. So calculate it carefully in advance.
| Your situation | KOR? |
|---|---|
| Mostly private customers | Yes, you are cheaper for them |
| Mostly business customers | No, they offset the VAT anyway |
| Large investments coming up | No, you lose the VAT refund |
| Hardly any costs carrying VAT | Yes, you give up little |
| Turnover close to € 20,000 | Careful, you must exit mid-year |
Worked example: € 18,000 turnover, private customers
- Without the scheme: VAT payable
- € 3,780
- Less: VAT on costs you reclaim
- € 600
- Net payable without the scheme
- € 3,180
Result: With the scheme you keep that € 3,180, or use it to lower your price. You do give up the € 600 VAT refund
Signing up, and getting out again
You register via the business portal of the tax authorities, at the latest four weeks before your desired start date. Since 2025 your turnover must also have stayed below 20,000 euros in the previous calendar year. If you deregister, you can only rejoin after the rest of the calendar year of deregistration plus the year after that; this is not a switch you flip annually.
The EU scheme for cross-border customers
Since 2025 there is also an EU variant. It lets you use the exemption for customers in other EU countries, provided your total turnover across the EU stays below 100,000 euros. You register for it separately. See also VAT with clients abroad.
Frequently asked questions
What is the turnover limit for the scheme in 2026?
Twenty thousand euros per calendar year. Since 2025 your turnover must also have stayed below that limit in the previous year. It concerns turnover, not profit.
What if I exceed 20,000 euros mid-year?
From the supply that takes you over, the exemption ends and you charge VAT again. You deregister with the tax authorities and file returns for the rest of the year.
Can I switch in and out each year?
No. If you deregister, you must wait out the rest of that calendar year plus the whole year after it before rejoining. So think ahead: if investments are planned, the scheme is usually unfavourable.
Must I file VAT returns under the scheme?
Usually not, which is its main convenience. There are exceptions, for instance when VAT is reverse-charged to you on purchases from abroad. Then you do file for that.
Can I reclaim VAT on my costs under the scheme?
No. You are exempt, so you charge no VAT and deduct none. That is the core trade-off: less administration against losing your input VAT.
Does the scheme change my income tax?
No, the scheme concerns VAT only. Your profit, deductions and income tax return stay exactly the same, including the self-employed deduction if you meet the hours criterion.
Sources
- Small business scheme conditions: € 20,000 turnover limitBelastingdienst · belastingdienst.nl
- Deregistering from the KOR and when you can rejoinBelastingdienst · belastingdienst.nl
Sources checked on
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.
