The name of the scheme says it all: the VAT scheme for small businesses applies from entrepreneur; not per company.
KOR
Since mid-2021, the Small Business Scheme (KOR) under VAT law has been an exemption. This exemption applies to businesses that apply for it and whose turnover per calendar year does not exceed €10,000 (the turnover threshold). The effect of applying the KOR is that no VAT needs to be paid on supplies made, but, of course, VAT on supplies received (input VAT) may not be deducted either. Where annual turnover does not exceed €1,800, the KOR may be applied without the need to submit a request to the Tax and Customs Administration.
Solar panels
In practice, the KOR is widely used by private individuals who have had solar panels installed on their homes. When these solar panel owners feed electricity into the grid (feed-in), they are regarded as VAT-registered businesses. The “VAT trick” involved claiming back the VAT on the purchase of the solar panels and then opting to apply the KOR. From 2023 onwards, this trick will no longer be necessary because, in the situation where the trick was previously applied, solar panels are now supplied VAT-free.
A self-employed person (tax adviser) brought a case before the Arnhem-Leeuwarden Court of Appeal after having solar panels installed on his private residence. The Tax and Customs Administration refused to apply the KOR to the solar panels. The Court agreed with this decision. When assessing the turnover threshold, consideration must be given not only to the solar panel business but also to his activities as a tax adviser. The total turnover naturally exceeded €10,000 by a considerable margin (incidentally, the case fell under the old KOR regime, but this does not affect the tax court’s ruling). Recently, the Supreme Court This judgement has been upheld.
Of course, the situation would be different if the tax consultancy firm had been operated not as a sole trader but as a general partnership (VOF) or a private limited company (BV). This is because a general partnership and a private limited company are themselves classified as VAT-registered businesses.