What is the KOR threshold?

The KOR threshold is 20,000 euro of turnover (omzet) per calendar year: stay below it and register, and you can join the small businesses scheme (kleineondernemersregeling, KOR) and be exempt from VAT (BTW). You then charge no VAT on your invoices and file no VAT return either. You can find more topics for entrepreneurs on our entrepreneurs hub.

What exactly is the KOR?

The KOR is the small businesses scheme (kleineondernemersregeling), an exemption where you charge no VAT and do not have to file a VAT return. The scheme is meant for entrepreneurs with limited turnover who want less administrative work. You choose it yourself by registering with the Belastingdienst, and it applies to your whole business rather than per client or per assignment.

How high is the turnover threshold for the KOR?

The turnover (omzet) threshold for the KOR is 20,000 euro per calendar year, and that is the hard upper limit you must stay below to keep the exemption. It concerns your total annual turnover, so all turnover of your business combined. Keep good track of your turnover during the year, so you see in time whether you are approaching that 20,000 euro.

What does VAT exemption mean for you?

VAT exemption means you put no VAT on your invoices and file no periodic VAT return (btw-aangifte) with the Belastingdienst anymore. In return, you also have no right to VAT deduction, so the VAT on your purchases and costs cannot be reclaimed. For someone who buys little this can be favourable, while for someone who invests a lot it can work out badly.

How do you register for the KOR?

You register for the KOR with the Belastingdienst, and note: if you join, your participation lasts at least 3 years. That term matters, because you cannot simply switch each quarter (kwartaal) between charging VAT and not. So think ahead before you register. If you are still liable for VAT, check when your VAT for the last quarter is due and must be paid.

What happens if you go above the threshold?

If you exceed 20,000 euro of turnover during the year, you are liable for VAT again from that moment for the rest of the year. You must then charge VAT on your invoices again and file a VAT return. Keep a close eye on your turnover, because the excess takes effect once you pass the limit and not only the following year.

Source: Belastingdienst, belastingdienst.nl. Amounts and conditions are date-sensitive; check the current scheme before you decide.

Author: Mariusz Mojka.