The Dutch small businesses scheme (KOR): invoicing without VAT

The small businesses scheme (kleineondernemersregeling, KOR) is a VAT exemption for businesses with limited turnover. If you take part, you charge no VAT and file no VAT returns. That saves paperwork, but the scheme has downsides too. Here is how it works.

Who is the KOR for?

You can take part if you are established in the Netherlands and your turnover is no more than 20,000 euro per calendar year. The scheme is open to every legal form, so freelancers, sole traders and private limited companies alike. You register with the Belastingdienst; since 2025 the scheme has become more flexible and leaving it again is easier. If your business is established in Belgium, the Belgian small business exemption scheme applies instead, with a threshold of 25,000 euro.

What does the KOR mean for your invoices?

• No VAT: you state no VAT amount and no VAT rate on your invoice.
• Mention the exemption: state on the invoice that you are exempt from VAT under the KOR, so your client immediately understands why there is no VAT on it.
• The rest stays the same: a unique invoice number, the date, a description and your details are all still required. See the checklist in What must a Dutch invoice contain.

Reverse charge and clients abroad

The KOR only covers turnover that is taxed in the Netherlands. If you provide a service to a business in another EU country, that service is usually taxed in your client’s country. The KOR does not change that: the invoice still reverse-charges the VAT to your client. For clients in the Netherlands the exemption applies, even where VAT would normally be reverse-charged, such as subcontracting in construction.

The advantages

• No VAT returns, so less administration.
• For private customers you effectively become cheaper: they cannot deduct VAT anyway, so your price without VAT is their final price.

The disadvantages

• No input VAT deduction: you cannot reclaim the VAT on your own purchases and investments. If you are about to invest, the KOR often works out badly.
• For business clients it makes little difference: they normally deduct VAT, so your invoice without VAT is not cheaper for them.
• Watching the threshold is your job: if you pass 20,000 euro of turnover during the year, the exemption ends immediately and you charge VAT again from that moment.

Should you join?

Rule of thumb: if you mainly serve private customers, have few costs and stay comfortably under the turnover threshold, the KOR is often attractive. If you mainly serve businesses, or investments are planned, simply charging VAT is usually better. In doubt, work out both scenarios or ask the Belastingdienst or your bookkeeper. If you do charge VAT, read Calculating VAT for the rates.

The KOR in factuurmaken

If you use the KOR, turn it on in your company details. From then on your invoices and quotes carry no VAT and the exemption note is added automatically, also for clients still set to standard VAT. Reverse charge keeps working for clients abroad. Your dashboard warns you once your turnover this year gets close to 20,000 euro.

With factuurmaken you produce a tidy, professional invoice either way: with automatic VAT calculation, or without VAT if the KOR applies to you.