What is the KOR small business scheme in the Netherlands and should I use it?
The KOR (kleineondernemersregeling) is a Dutch BTW exemption for businesses with annual Dutch taxable turnover below EUR 20,000. Under the KOR you charge no BTW on your supplies, file no BTW returns, but also cannot recover input BTW on purchases. It simplifies administration but is only beneficial in certain situations.
Detailed Explanation
## The KOR Small Business Scheme (Kleineondernemersregeling)
The KOR is the Dutch BTW small business exemption, overhauled in 2020. It is available to any business — BV or sole trader — with Dutch taxable turnover below EUR 20,000 per calendar year.
### What the KOR Does
Under the KOR: - You are exempt from charging BTW on your Dutch supplies (no BTW on your invoices) - You do not file quarterly or annual BTW returns - You cannot recover input BTW (voorbelasting) on your business purchases - You cannot include a BTW number on your invoices in the standard BTW-charging context
The KOR is a turnover-based threshold exemption. Once in the KOR, you remain exempt as long as turnover stays below EUR 20,000 in any 12-month rolling period. If you exceed EUR 20,000, you must deregister from the KOR and register for regular BTW.
### How to Apply for the KOR
- Log in to Mijn Belastingdienst Zakelijk
- Navigate to the BTW section and select KOR application
- The KOR takes effect from the start of the next quarter after your application is processed
- You cannot apply retroactively — plan ahead
### Minimum Duration
Once you opt into the KOR, you must remain in it for at least 3 years unless your turnover exceeds EUR 20,000. You cannot simply opt out after a few months.
### When Is the KOR Beneficial?
The KOR is most beneficial when:
Your customers are primarily consumers (B2C)
Private individuals cannot recover BTW anyway. By using the KOR you effectively make your prices 21% or 9% cheaper without reducing your own margin — a significant competitive advantage.
Your input BTW is low
If you have few BTW-bearing business costs, you are not sacrificing much by losing input BTW recovery. A consultant who works from home and has mainly software subscriptions has limited input BTW to recover.
Administrative simplicity matters
No quarterly returns, no BTW bookkeeping, no Mijn Belastingdienst portal compliance. For very small businesses this administrative saving is worth more than small input BTW recovery amounts.
### When Is the KOR Not Beneficial?
Your customers are primarily businesses (B2B)
Business customers can fully recover BTW. Whether you charge EUR 100 + 21% BTW or EUR 121 without BTW makes no difference to their cost. But your KOR status means you cannot recover the BTW on your own business purchases.
You have significant input BTW
A business that buys equipment, materials, or professional services bearing BTW loses the ability to recover those costs.
You are near the EUR 20,000 threshold
If your turnover is likely to grow above EUR 20,000 soon, you will need to register for regular BTW anyway. The administrative burden of switching mid-year and adjusting pricing for clients is disruptive.
### The EUR 20,000 Threshold Calculation
The threshold is based on the total of your Dutch taxable supplies in a calendar year. Intra-EU zero-rated supplies, exports, and exempt supplies are excluded from the calculation. Only your Dutch domestic taxable turnover at any rate counts.
### Deregistering from the KOR
If you want to leave the KOR voluntarily, you must request deregistration from the Belastingdienst at least 4 weeks before the intended end date. The earliest voluntary exit is after 3 years of KOR participation. If you exceed EUR 20,000 mid-year, you must deregister immediately.
Source: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/btw/btw_berekenen_voor_uw_omzet/geen_of_laag_btw_tarief/regeling_kleine_ondernemers_kor/
Real-World Examples
B2C yoga instructor — KOR is ideal
A yoga teacher earns EUR 15,000 per year from individual clients who cannot recover BTW. Under the KOR she charges no BTW, keeping her pricing simple. Her only BTW-bearing costs are a Spotify subscription and mat purchases (EUR 200 BTW per year foregone). The administrative saving and pricing clarity far outweigh EUR 200 of lost input BTW recovery.
B2B consultant — KOR is disadvantageous
A business consultant bills EUR 18,000 per year to corporate clients. Under the KOR he cannot recover BTW on his laptop, software, professional training (EUR 2,000 BTW per year). His corporate clients can recover BTW themselves so there is no pricing advantage. He should register for regular BTW to recover his input BTW.
Growing freelancer — KOR creates disruption
A freelancer in the KOR with EUR 16,000 turnover takes on a new client mid-year and projects crossing EUR 20,000. She must deregister from the KOR and start charging BTW immediately. Her existing clients receive a surprise invoice with BTW added. Better to have planned ahead.
Common Mistakes to Avoid
- Forgetting the 3-year minimum commitment when opting into the KOR — you cannot exit voluntarily for 3 years even if circumstances change
- Not monitoring turnover against the EUR 20,000 threshold — exceeding it without notifying the Belastingdienst means you have been charging no BTW on supplies that should have been subject to BTW
- Including intra-EU or export turnover in the EUR 20,000 threshold calculation — only Dutch domestic taxable supplies count
- Assuming the KOR is always better for small businesses — for B2B-focused businesses with significant input BTW costs, regular BTW registration is often financially superior
Frequently Asked Questions
Can a BV use the KOR?
Yes. The KOR applies to both natural persons (sole traders, ZZP) and legal entities (BVs, NVs, cooperatives). A BV with turnover below EUR 20,000 can apply for the KOR. The 3-year minimum and all other conditions apply equally.
Does the KOR affect my vennootschapsbelasting (VPB) filing?
No. The KOR only affects BTW obligations. VPB is calculated on profit and is independent of whether you are in the KOR or not. You still file a VPB return and pay VPB on taxable profit regardless of KOR status.
What happens to input BTW already recovered if I join the KOR?
When you enter the KOR, you may have to pay back some previously recovered input BTW on goods and assets still in use — particularly capital goods where the 5-year (10-year for immovable property) BTW adjustment period has not yet expired. The Belastingdienst calculates this adjustment.
Can I still export goods or make intra-EU supplies under the KOR?
Yes, but those supplies are governed by their own rules and may require BTW registration regardless of the KOR. The KOR does not exempt you from BTW obligations related to intra-EU acquisitions or imports.
Does the KOR threshold apply per business or per owner?
Per business entity (BTW registration). If a person has two separate businesses, each is assessed separately against the EUR 20,000 threshold for its own Dutch taxable supplies. The KOR must be applied for separately for each registration.
Practical Tips
- Before opting into the KOR, model your annual input BTW recovery — if it exceeds the administrative saving from not filing quarterly returns, regular BTW registration is financially better
- Set a turnover tracking alarm at EUR 18,000 to give yourself time to deregister from the KOR and notify clients before you hit EUR 20,000
- When leaving the KOR and registering for regular BTW, update your invoicing template to add BTW and give regular clients notice — a surprise BTW charge damages client relationships
- Apply for the KOR before your first quarter of trading if eligible — retroactive application is not possible and you will owe BTW on supplies made before the KOR start date
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