The Tax and Customs Administration has launched a campaign across various media to draw the attention of VAT-registered businesses to the Small Business Scheme under VAT (KOR).
New
The KOR has been in existence for a long time, but was revised with effect from 1 January 2020. A key change is that the KOR no longer applies automatically; an application must now be made.
That application must be submitted at least 4 weeks before the intended start date. This means that the Tax and Customs Administration must receive the application for the KOR, with effect from 1 January 2021, by 2 December 2020 at the latest must have received.
Registration must be carried out using a form.
The KOR cannot come into effect at any random time, but only on the first day of a tax return period. The next date on which the KOR can come into effect is 1 January 2021.
PLEASE NOTE: if you opt for the KOR, you are, in principle, bound by this choice for 3 years!
Exemption
Another important change is that, with effect from 2020, the KOR is an exemption. This means that the VAT you pay on goods and services you purchase is not deductible. If you have purchased goods for your business in the past five years, opting for the KOR may mean that you have to repay the VAT you have deducted.
We explain how the new KOR works in a factsheet.