Changes in the small business facility: are you in or are you out?

If your annual revenue is € 20,000 or less, you may want to consider making use of the small business facility (Dutch acronym: KOR). Under the facility, you will be exempt from VAT. That said, there are some drawbacks to the facility as well. Please contact your tax adviser to find out whether the facility would be the best option for you.

With effect from 2020, the Dutch Tax and Customs Administration will look at your revenue to determine whether you qualify for the small business facility. If your annual revenue is € 20,000 or less, you are eligible for the facility.

Applying for the facility

If you apply for the small business facility at the Tax and Customs Administration and are successful in your application, the facility will be in effect a period of three years. You will then be exempt from filing VAT returns, you cannot charge VAT on your sales invoices and you will no longer qualify for input tax relief.

Do you file your VAT returns quarterly? Then you can opt in on the facility with effect from 1 April 2020 provided that you apply to the Tax and Customs Administration within the set deadline.

If your input tax is higher than your VAT liability, the new facility is not necessarily a tax-efficient option. The same holds true if you plan to make large investments over the next three years. Please contact your adviser to find out whether the new facility would be a tax-efficient option for you. Just send an email to international@acconavm.nl.