KOR 2025: Changes for Small Businesses in the Netherlands

What is KOR?

For those unfamiliar, the KOR is a VAT exemption scheme for small businesses in the Netherlands. It allows entrepreneurs with an annual turnover below €20,000 to operate without charging or deducting VAT, simplifying their administrative burden.

Key Changes Coming in 2025

1. Goodbye, 3-Year Commitment
   The mandatory 3-year participation period is being scrapped. From 2025, you can opt out of KOR whenever you want. This flexibility is a game-changer for businesses with fluctuating incomes.
2. Faster Re-enrollment
   Previously, if you left KOR, you had to wait 3 years to rejoin. Now, you'll only need to wait until the end of the following calendar year. This change allows for more dynamic business planning.
3. Introducing EU-KOR
   A new European KOR will allow Dutch businesses to apply for VAT exemption in other EU countries. The catch? Your total EU-wide turnover must not exceed €100,000.
4. Changes for Foreign Entrepreneurs
   Foreign entrepreneurs with fixed establishments in the Netherlands will no longer be eligible for KOR from 2025. However, EU businesses without a Dutch establishment may become eligible under the new EU-KOR scheme.

Preparing for the Changes

1. Mark Your Calendar: From October 1, 2024, you can enroll in or cancel KOR through Mijn Belastingdienst Zakelijk.
2. Review Your Business Model: With the new flexibility, consider how KOR fits into your long-term business strategy.
3. EU Expansion?: If you're eyeing other EU markets, the new EU-KOR might be your ticket to simplified VAT management across borders.

The Bottom Line

These changes to KOR are set to make life easier for small business owners in the Netherlands, offering more flexibility and opportunities for cross-border trade within the EU. Whether you're a Dutch national or a foreign entrepreneur with a business established in the Netherlands, staying informed about these updates is crucial for making the most of the KOR scheme in 2025 and beyond.

Remember, while these changes bring new opportunities, they also come with responsibilities. Always consult with a tax professional to ensure you're making the best decisions for your unique business situation. For more information and details about the KOR system, visit the tax department page.