VAT & KOR
What is the KOR?
A scheme for small businesses under €20.000 turnover: you stop charging VAT, and you stop reclaiming it too.
3 min read
In plain English
The Kleineondernemersregeling (KOR) is a VAT exemption for very small businesses. If your turnover stays under €20.000 in a calendar year, you may choose to step out of the VAT system.
While you take part, you do not add VAT to your invoices and your VAT paperwork becomes far lighter. In return you may not reclaim the VAT on anything you buy for the business.
It is a choice, not an obligation, and you commit for three years unless you cross the threshold.
| Regular VAT | KOR | |
|---|---|---|
| Charging VAT | Yes, on every invoice | Usually no VAT charged |
| VAT returns | Quarterly return | Simplified obligations while in KOR |
| VAT on purchases | Generally reclaimable | Not reclaimable |
| Price to private customers | 21% higher for the same margin | Looks cheaper |
| Best for | Higher-turnover businesses and heavy buyers | Small, service-only businesses with private clients |
Why it matters
- Your prices look 21% cheaper to private customers, who cannot reclaim VAT anyway.
- Much less admin: no quarterly VAT return while you take part.
- But if you buy a lot — equipment, software, a workspace — losing the reclaim can cost more than the admin saves.
When it applies
- Turnover under €20.000 per calendar year, measured on what you invoice.
- You are established in the Netherlands.
- You apply at least four weeks before the quarter in which you want to start.
A practical example
Two freelancers, same turnover
Anna teaches yoga to private clients and earns €16.000 a year with almost no purchases. KOR suits her: her clients pay less and her admin nearly disappears.
Ben builds websites for companies and also earns €16.000, but he spends €6.000 a year on hardware and software. His business clients reclaim VAT anyway, so charging it costs them nothing — and staying in the VAT system lets Ben reclaim around €1.250. For him, KOR would be a loss.
Common mistakes
- Joining just before a big investment and losing the VAT reclaim on it.
- Forgetting that the €20.000 counts all turnover in the calendar year, not per client.
- Leaving VAT off invoices while not actually registered for the scheme yet.
- Not watching the threshold during a good year — see the topic on crossing it.
Scenario
I'm a freelance designer earning €18.000
Should I look into the KOR?
Yes — you are under €20.000, so the scheme is open to you. Two questions decide it: do you mostly invoice private customers (KOR helps) or businesses (KOR rarely helps), and do you expect large purchases this year (KOR hurts)? You are also close enough to the threshold that a couple of extra projects could push you over, so read the crossing guide before you sign up.
You may also want to learn about
- What happens if I cross the KOR threshold?Passing €20.000 is good news with paperwork attached. Here is the sequence, step by step.Read the full topic
- What is VAT (BTW)?The tax you add to your prices, collect from customers, and pass on to the tax office. It never belongs to you.Read the full topic
- What a Dutch invoice must containNine details make an invoice valid. Miss one and your client may not be able to deduct it — or pay it on time.Read the full topic
These explanations are simplified for clarity and are not tax advice. Rules change; check with the Belastingdienst or ask Ardel for a review.