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If you run a small business in the Netherlands, you may be eligible for the Small Businesses Scheme (kleineondernemersregeling, KOR). In that case you will pay less turnover tax (VAT) to the Dutch Tax and Customs Administration (Belastingdienst). In some cases, you may not have to pay any VAT at all. You can also be exempt from the administrative obligations of the VAT system, which means that you will no longer have to file returns periodically.
When do you qualify?
- Your business has a permanent establishment in the Netherlands and must be registered.
- You run a one-man business or your company is a joint venture involving natural persons, such as a partnership (maatschap) or a general partnership (vennootschap onder firma).
- After deduction of input tax (voorbelasting), you pay less VAT than the annual threshold.
- In order to be eligible for exemption from the administrative obligations, the VAT to be paid must also be less than an annual threshold.
How to apply?
You must apply the deduction to either your last return of the year or your first return of the following year. You can submit an application for exemption from the administrative obligations of the VAT system in writing to your local office of the Dutch Tax and Customs Administration.