The KOR: when is the small business scheme smart?
Updated on 12 July 2026 · 7 min read
If your revenue stays under € 20,000 per year, you can opt for the Dutch small business scheme (KOR): no more VAT on your invoices and no VAT returns. Sounds like a pure win, but it often is not: you also lose your input VAT, and joining or leaving has consequences for years. Here is how to weigh it, with a worked example.
What the KOR actually does
Under the KOR you are exempt from VAT. You put no VAT on your invoices, remit nothing and skip the quarterly return. In exchange you reclaim no input VAT: the VAT on your own business purchases is simply lost. The threshold is € 20,000 of Dutch revenue per calendar year.
Note that the KOR only concerns VAT: you remain an entrepreneur for income tax, your deductions still apply, and your bookkeeping and seven-year retention duty stay exactly the same.
Worked example: same revenue, opposite outcomes
Two freelancers, both with € 15,000 revenue per year and € 2,500 of business costs carrying € 525 of VAT.
Femke photographs consumers. Her clients cannot reclaim VAT; only the total price matters to them. Without the KOR, a good chunk of every total price goes to the tax office as VAT. With the KOR and unchanged prices she keeps that part herself: € 3,150 on € 15,000 of revenue. Subtract the € 525 of lost input VAT and she is about € 2,625 per year better off.
Bram builds websites for businesses. His clients deduct the VAT on his invoices anyway; whether 21% is added on top makes no difference to them. The KOR cannot raise his prices, but it does cost him € 525 of input VAT, and much more in a year with a new laptop. For him the scheme only saves some paperwork, at a price.
Who usually benefits
| Your situation | KOR? |
|---|---|
| Mostly consumer clients, few costs | Usually a win |
| Mostly business clients | Usually a loss |
| Big investment coming up | Skip it: you lose the VAT refund |
| Revenue hovering around € 20,000 | Risky: you can drop out mid-year |
| Small side business next to a job | Often a win |
| Already VAT-exempt work (healthcare) | Adds little |
Joining and leaving
You register via Mijn Belastingdienst Zakelijk. You can join at the start of a return period, but the registration must be in well ahead: count on at least four weeks before the intended start date.
Since 1 January 2025 the scheme is far more flexible: the old three-year minimum participation is gone and you can deregister at any time, effective at the end of a quarter, if you request it at least a month ahead. Leaving is not free of consequences though: after voluntarily deregistering you are excluded for the rest of that calendar year plus the following calendar year. Stepping out briefly for one big investment and rejoining is not an option, so weigh the decision over multiple years. Check the current terms on belastingdienst.nl.
Outgrowing the threshold
Cross € 20,000 during the year and the exemption ends immediately: the delivery that crosses the line and everything after it is taxed normally, and you must deregister at once. The same exclusion period applies before you may rejoin. The tax office does not warn you when you get close; monitoring your revenue is entirely up to you.
Revenue in other EU countries: the EU scheme
Since 2025 an EU variant exists. Selling to clients in other EU countries, you can apply the local small business scheme there too, provided your total EU-wide revenue stays under € 100,000 and you stay under the local threshold of each country. You register for it with the Dutch tax authority and then report your revenue quarterly. Irrelevant for most freelancers with only Dutch clients, worth investigating if you sell across the border.
Mind your invoices
Under the KOR you state no VAT on your invoices, not even "0%". Many participants add a line such as "exempt from VAT under the small business scheme (KOR)" so clients do not ask for a VAT breakdown. Also read invoicing without VAT and what must be on your invoice.
How Finq handles it
Set the VAT rate on your invoices to exempt and they are KOR-proof, without a VAT line. Because all your revenue lives in the app, the reports show at any moment where you stand against the € 20,000 threshold, exactly the monitoring the tax office leaves to you. Still in doubt? Run both scenarios; the VAT calculator helps convert between amounts including and excluding VAT, and the VAT return guide shows what filing looks like without the KOR.
This is general information, not personal tax advice. The terms and thresholds reflect August 2026; verify them on belastingdienst.nl or consult a bookkeeper before joining or leaving.