BV Formation
Finance
Applying for the Small Business VAT Scheme (KOR) in the Netherlands: A Step-by-Step Guide
Learn how to apply for the Dutch KOR in 2026. Discover who qualifies, when the small business VAT scheme saves money, how to apply step by step, and what happens if you exceed the €20,000 threshold.
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18 mins
Intro
Small Dutch businesses spend a disproportionate amount of time on VAT administration. Quarterly returns, invoice requirements, bookkeeping corrections, and VAT recovery rules create compliance obligations that often feel heavier than the actual tax amounts involved. For freelancers, side businesses, small online shops, and early-stage entrepreneurs, the Dutch KOR scheme exists specifically to reduce that burden. Yet many entrepreneurs misunderstand what the regeling actually does. The KOR is not a subsidy, a tax discount, or free money from the government. It is a voluntary VAT exemption, and whether it benefits you depends entirely on how your business earns money and what your costs look like.
That distinction matters more than most entrepreneurs realize. Some businesses save thousands of euros under the KOR because their customers are private consumers who cannot reclaim VAT. Others end up worse off because they lose the ability to recover VAT on investments, software, equipment, or contractors. Since the rules changed significantly in 2025, including the abolition of the old mandatory three-year participation period, the decision has become more flexible but also more strategic. Entrepreneurs who are starting a company in the Netherlands should understand the KOR from the beginning, because the right choice depends on turnover expectations, customer profile, investment plans, and future growth.
What Is the KOR and What Does It Actually Give You?
The KOR, short for kleineondernemersregeling or kleine ondernemersregeling, is a voluntary VAT exemption for Dutch entrepreneurs whose annual turnover remains below €20,000 excluding VAT. Participating businesses stop charging VAT on invoices and in most situations stop filing quarterly VAT returns as well. In exchange for this administrative simplicity, the entrepreneur loses the right to reclaim VAT paid on business expenses and investments.
That trade-off is the entire economic logic of the scheme. Entrepreneurs often focus on the VAT they no longer need to charge customers, but the more important question is whether they are currently reclaiming significant amounts of input VAT on costs. A consultant working from home with almost no business expenses experiences the KOR very differently from a webshop owner buying inventory every month.
The KOR applies broadly across legal structures. Sole traders, BVs, NVs, foundations, associations with commercial activities, and partnerships can all participate if they meet the conditions. The scheme is therefore not linked to legal form but to VAT status and turnover.
Since 2025, one of the most important changes is the abolition of the old three-year lock-in period. Entrepreneurs are no longer forced to remain in the scheme for three full years. Instead, participation now lasts at minimum from the chosen entry date until the end of the following calendar year, which makes the regeling far more flexible for growing businesses.
Who Qualifies for the KOR in 2026?
The KOR sounds simple on paper, but eligibility depends on four separate conditions that must all be satisfied simultaneously. Missing even one of them means the entrepreneur cannot participate. The Belastingdienst also tightened the rules in 2025 specifically to prevent businesses from alternating in and out of the scheme around high-revenue years.
To qualify for the KOR in 2026, a business must:
Be established in the Netherlands.
Have annual turnover below €20,000 excluding VAT in the current calendar year.
Have had turnover below €20,000 in the previous calendar year as well.
Be registered as a VAT entrepreneur with the Belastingdienst and possess a BTW number.
The turnover calculation is narrower than many entrepreneurs assume. Only turnover that would normally be subject to Dutch VAT counts toward the threshold. This includes:
turnover taxed at 21%;
turnover taxed at 9%;
turnover taxed at 0%;
turnover where VAT is reversed to another Dutch business.
Several categories do not count toward the €20,000 threshold because they are already VAT-exempt under Dutch law. Examples include:
financial services;
insurance activities;
most healthcare services;
education;
childcare;
many real estate exemptions.
For new entrepreneurs, the system is relatively favourable. A freelancer starting on 1 September 2026 who expects €8,000 turnover during the remaining four months of the year still qualifies, because the Belastingdienst only evaluates turnover inside that calendar year. Businesses that are unsure about their ongoing VAT obligations should also understand when to file VAT, since leaving the KOR or exceeding the threshold immediately reactivates normal VAT filing obligations.
When Does the KOR Actually Save You Money? A Decision Framework
The KOR is one of the most misunderstood tax decisions for Dutch entrepreneurs because the financial effect depends heavily on business model and customer profile. The scheme reduces administration, but whether it improves profitability requires a basic VAT calculation.
Three variables determine whether the KOR is financially beneficial:
how much VAT you normally collect from customers;
how much VAT you normally reclaim on costs;
whether your customers are businesses or private individuals.
The B2B versus B2C distinction is critical. Business customers can reclaim VAT themselves. That means removing VAT from your invoices does not actually make your services cheaper for them. It mainly reduces administrative work. Private consumers, however, cannot recover VAT. If you stop charging VAT under the KOR, your prices effectively become cheaper without reducing your margin.
The KOR is usually attractive for:
low-cost freelancers serving consumers;
side businesses with limited expenses;
startups with low investment needs;
part-time entrepreneurs with modest turnover.
The KOR is usually less attractive for:
businesses with major investments;
companies buying inventory regularly;
B2B-focused service providers;
businesses likely to exceed €20,000 turnover soon.
Scenario | Turnover | VAT-bearing costs | Customer type | Outcome |
Freelance designer | €15,000 | €2,000 | B2C | KOR saves roughly €2,730 net |
IT consultant | €15,000 | €2,000 | B2B | Mostly administrative benefit only |
Webshop with inventory | €18,000 | €8,000 | B2C | KOR often less attractive |
Side-business tutor | €10,000 | €500 | Private clients | KOR highly attractive |
In the first scenario, the entrepreneur avoids charging around €3,150 VAT to customers while only losing roughly €420 in VAT recovery on costs. That creates a substantial net advantage. In the B2B example, the customers could already reclaim the VAT anyway, so the entrepreneur mainly saves bookkeeping effort rather than generating additional profit.
How to Apply for the KOR Step by Step
The KOR application procedure became fully digital in 2024. Paper forms are no longer accepted. Applications must now be submitted through Mijn Belastingdienst Zakelijk, and timing matters more than most entrepreneurs expect because the scheme can only begin at the start of a calendar quarter.
Before applying, the entrepreneur must already possess a BTW number. Newly registered businesses that have just completed getting your KvK number should first wait for their VAT registration confirmation from the Belastingdienst.
Step 1: Log Into Mijn Belastingdienst Zakelijk
Use:
DigiD for sole traders;
eHerkenning for companies and BVs.
Step 2: Navigate to the VAT Section
Inside the VAT area, select the KOR application option.
Step 3: Choose the Desired Start Date
The start date must always be:
1 January;
1 April;
1 July;
or 1 October.
Step 4: Confirm the Application
Review the turnover expectation carefully before confirming.
Step 5: Continue Filing VAT Returns Until Approval
Many entrepreneurs incorrectly stop filing immediately after applying. The KOR only becomes active once the Belastingdienst sends written confirmation with the definitive start date.
The processing timeline is approximately eight weeks. Applications must arrive at least four weeks before the desired quarter start.
Desired start date | Latest recommended submission |
1 January 2026 | 3 December 2025 |
1 April 2026 | 4 March 2026 |
1 July 2026 | 3 June 2026 |
1 October 2026 | 2 September 2026 |
If the application arrives too late, the start date automatically shifts to the following quarter.
What Changes the Moment Your KOR Starts
The practical effects of entering the KOR begin immediately on the approved start date. The biggest operational change is invoicing. From that moment onward, invoices may no longer include VAT amounts.
Instead, invoices should contain the mandatory exemption statement:
“Vrijgesteld van btw op grond van de kleineondernemersregeling.”
The invoice should also no longer display a BTW amount. In practice, many accounting systems need reconfiguration at this point to avoid accidental VAT calculations.
Administrative obligations decrease substantially, but they do not disappear completely. Most KOR participants stop filing regular quarterly VAT returns. Exceptions still exist, particularly when the entrepreneur:
performs cross-border EU transactions;
must revise previously reclaimed VAT;
exceeds the €20,000 threshold.
The financial downside becomes visible on the purchasing side. Business costs become more expensive because VAT can no longer be reclaimed. Entrepreneurs with major equipment purchases or software subscriptions often underestimate this effect.
Another important area is the VAT revision obligation, known as the herzieningsregeling. If VAT was previously reclaimed on investments before joining the KOR, part of that VAT may need repayment.
The revision periods are:
Asset category | Revision period |
Equipment and moveable assets | 5 years |
Real estate | 10 years |
Investment services related to real estate | 5 years |
Joining the KOR during an active revision period triggers a proportional repayment obligation for the remaining years.
What Happens When Your Turnover Approaches or Crosses €20,000?
Entrepreneurs inside the KOR must continuously monitor annual turnover. The moment the threshold is exceeded, the scheme ends immediately. There is no grace period and no correction window.
The critical moment is the transaction that pushes total turnover above €20,000. From that exact transaction onward:
the KOR ends;
VAT must be charged on all subsequent sales;
the Belastingdienst must be informed;
VAT returns resume.
Importantly, sales completed before the threshold breach remain VAT-free. Only transactions after the crossing point fall back under normal VAT rules.
The exclusion period is significant. Once the KOR ends due to threshold breach, re-entry is blocked until the end of the following calendar year.
Example:
Threshold exceeded in September 2026.
Earliest possible re-entry: 1 January 2028.
Businesses whose turnover fluctuates close to €20,000 often discover that the KOR creates more complexity than it removes. Switching back into VAT obligations mid-year can confuse customers, disrupt pricing, and complicate bookkeeping.
Deregistering From the KOR: When and How
Since the 2025 reforms, leaving the KOR voluntarily has become substantially easier. Entrepreneurs are no longer trapped for three years. Deregistration is now possible at any time through Mijn Belastingdienst Zakelijk.
The exit itself does not take effect immediately. In most cases, deregistration becomes active from the first day of the next calendar quarter after processing.
If the request arrives too close to the quarter start, the effective date shifts one additional quarter forward.
The exclusion rule still applies after voluntary exit. Entrepreneurs cannot re-enter until the end of the following calendar year.
Exit date | Earliest re-entry |
1 April 2026 | 1 January 2028 |
1 October 2026 | 1 January 2028 |
1 January 2027 | 1 January 2029 |
Voluntary exit commonly makes sense when:
major investments are planned;
turnover growth accelerates;
large B2B clients are added;
recovering VAT becomes financially valuable again.
The EU-KOR: Using the Dutch KOR Across European Borders
Since 1 January 2025, entrepreneurs can also use the EU-KOR framework to apply small-business VAT exemptions across multiple EU member states. This expansion is especially relevant for freelancers and digital service providers working internationally.
The EU-KOR introduces an additional EU-wide turnover ceiling of €100,000 annually. Businesses must remain below:
€100,000 total EU turnover;
and each country's own national threshold.
Applications are submitted through Mijn Belastingdienst Zakelijk. Approved entrepreneurs receive a dedicated EU-KOR identification number.
The practical effect is potentially substantial. A Dutch freelancer supplying services to Germany or Belgium may under certain circumstances invoice without charging local VAT if turnover remains below those national thresholds.
There is an important compliance requirement, however. Entrepreneurs must actively monitor EU-wide turnover. Exceeding €100,000 triggers immediate EU-KOR exit.
For entrepreneurs evaluating broader tax optimization, VAT planning should always be analyzed alongside how much tax you pay overall, including income tax and corporate tax implications.
KOR and Your Financial Administration: What to Keep Track Of
One of the most persistent misconceptions around the KOR is that entrepreneurs no longer need proper bookkeeping. The reality is very different. The KOR removes many VAT obligations, but it does not remove the legal obligation to maintain a complete business administration.
KOR participants must still:
retain invoices and expense records;
track cumulative turnover;
preserve records for at least seven years;
maintain compliant invoices;
monitor whether the €20,000 threshold is approaching.
The KOR also has no impact whatsoever on:
income tax;
payroll tax;
corporate income tax;
annual accounts obligations.
A BV participating in the KOR still files corporate tax returns and a DGA still pays income tax on salary. Entrepreneurs comparing a BV or sole trader structure should therefore avoid treating the KOR as a replacement for broader financial administration.
Strong bookkeeping becomes especially important near the turnover threshold because proactive planning is always preferable to suddenly losing the exemption mid-quarter. Businesses uncertain about compliance obligations often benefit from understanding the difference between an accountant or bookkeeper, particularly once growth accelerates.
Spend Less Time on VAT Administration and More Time Growing Your Business
The KOR simplifies VAT administration, but it does not eliminate the broader financial obligations of running a Dutch business. Entrepreneurs still need reliable bookkeeping, payroll processing, annual accounts, turnover monitoring, and ongoing tax compliance. Once turnover grows or international transactions enter the picture, the complexity rises quickly.
Neno was built specifically for Dutch entrepreneurs who want financial administration to run in the background instead of dominating their schedule. We combine AI-native automation with certified accountants who understand Dutch VAT rules, DGA structures, payroll obligations, and BV compliance. Whether you want to incorporate your BV, automate your bookkeeping and payroll, or receive strategic support while scaling beyond the KOR threshold, Neno keeps your administration accurate, compliant, and continuously up to date.
As your business grows, decisions around VAT, payroll, investments, and corporate structure become interconnected. Having one integrated system that handles all of them together creates clarity and prevents costly mistakes later.
Book a demo and discover how much time Dutch entrepreneurs save when bookkeeping, payroll, VAT, and compliance run on one platform.
FAQs: The KOR in the Netherlands
What is the KOR and how does it work?
The KOR is a voluntary VAT exemption for Dutch entrepreneurs with annual turnover below €20,000 excluding VAT. Participants stop charging VAT and usually stop filing quarterly VAT returns.
Who can apply for the KOR in 2026?
Any Dutch VAT entrepreneur with turnover below €20,000 in both the current and previous calendar year can apply, including sole traders and BVs.
How do I apply for the KOR?
Applications are submitted digitally through Mijn Belastingdienst Zakelijk using DigiD or eHerkenning.
What is the deadline to apply for the KOR?
The application must reach the Belastingdienst at least four weeks before the desired quarter start date.
Can a BV use the KOR?
Yes. The KOR applies to all legal forms, including BVs, NVs, partnerships, and foundations with commercial activities.
What happens if I exceed €20,000 turnover?
The KOR ends immediately once turnover exceeds the threshold. VAT must then be charged on all subsequent sales.
Can I reclaim VAT on my costs while in the KOR?
No. Participating entrepreneurs lose the right to recover input VAT on business expenses and investments.
How do I deregister from the KOR?
Deregistration is handled digitally via Mijn Belastingdienst Zakelijk and usually becomes effective from the next calendar quarter.
What is the EU-KOR and how is it different?
The EU-KOR extends VAT exemption possibilities to other EU countries, subject to national thresholds and a total EU turnover ceiling of €100,000.
Do I still need to do any tax administration under the KOR?
Yes. Entrepreneurs must still maintain full bookkeeping records, track turnover, retain invoices for seven years, and comply with income tax or corporate tax obligations.
Written by
Nick Knuppe
CEO & Founder
