KOR: Dutch Small Business VAT Exemption Scheme Explained

What Is the KOR?

The Kleineondernemersregeling (KOR) is a Dutch VAT exemption scheme for entrepreneurs with annual turnover up to EUR 20,000 (excluding VAT). The modernised KOR has been in effect since 1 January 2020. Participation is voluntary and open to sole traders, partnerships (VOF), foundations, associations and even BVs – provided the turnover threshold is not exceeded.

How Does the KOR Work?

When you participate in the KOR:

• You do not charge VAT on your invoices.
• You do not need to file VAT returns.
• You cannot deduct input VAT on your purchases.
• You must state on your invoices that you apply the KOR.

The scheme applies for a minimum of 3 calendar years. You register via a form on the Belastingdienst website. The start date is always the beginning of a new quarter, provided you submit the registration at least 4 weeks in advance.

When Is the KOR Beneficial?

The KOR works best if you:

• Mainly provide services to private individuals (who cannot reclaim VAT).
• Have minimal VAT-liable purchases (no expensive equipment or stock).
• Want to reduce administrative burden.

Examples: freelance copywriter, private tutor, yoga instructor, small service provider.

When Is the KOR Disadvantageous?

The KOR is not beneficial if you:

• Make significant business purchases with VAT (laptop, office furniture, software subscriptions) – you cannot reclaim that VAT.
• Mainly sell to other businesses – they can reclaim VAT anyway, so your pricing advantage is limited.
• Expect to exceed the EUR 20,000 threshold. Once exceeded, the KOR ends immediately and you must charge VAT from that point onwards.

Exceeding the Threshold

The moment your turnover in the current calendar year exceeds EUR 20,000, the KOR ends immediately. From your very next supply or service, you must charge VAT and file returns. You must report this to the Belastingdienst yourself. You cannot re-enter the KOR for 3 years.

Registration and Deregistration

Register online on the Belastingdienst website at least 4 weeks before the start of a quarter. Deregistration is only possible after 3 years, also effective from a quarter start date.

Advice from MOJKA Finance

Not sure whether the KOR suits your situation? MOJKA Finance can calculate exactly what the scheme saves or costs you. Get in touch for a personalised analysis. As your expat accountant in Rotterdam, MOJKA Finance is here to help – contact us for a free consultation.