VAT
The small-business scheme up to €20,000: when to stay, when to leave
The small-business scheme is a VAT exemption at a maximum of €20,000 turnover a calendar year, for a business established in the Netherlands. You then charge no VAT and file no VAT return, and you also cannot deduct VAT on costs. Stay in with little input VAT and stable turnover. Leave when you invest, receive a VAT refund, or turnover reaches the threshold.
Last checked 28 October 20265 min read
What the scheme is
The kleineondernemersregeling is an exemption from VAT. Your business is established in the Netherlands, turnover is not more than €20,000 a calendar year, and you supply goods or services that are subject to VAT. It applies to a sole tradership, a partnership such as a VOF, and to legal entities such as a BV. It is not an income-tax scheme.
The €20,000 threshold
- The threshold applies to the year you register and to the year before.
- If you are not in the scheme yet, turnover is excluding VAT. If you are in it, turnover is the amount you charge the customer, because you may not charge VAT.
- Turnover taxed in another country does not count. Supplies at the Dutch zero rate, such as exports, do count. Selling a used investment good does not count.
- You register in the business tax portal, at least four weeks before the start date. Until the confirmation you keep filing VAT returns.
- If you exceed €20,000 in a calendar year, you deregister at once. The supply or advance that crosses the line is fully taxed.
- You can leave voluntarily from the first day of your return period. File the request at least four weeks ahead. An exclusion period then applies: the rest of that calendar year and the following year.
When to stay, when to leave
The tax authority weighs the admin, whether you pay or reclaim VAT on balance, whether your customers can deduct VAT, and whether turnover swings across the line. This is that choice in short.
| Situation | Lean towards staying | Lean towards leaving |
|---|---|---|
| Turnover | Stable at or under €20,000, including the previous year if you are registering. | You reach the line, or turnover is under it one year and over it the next. |
| VAT on costs | Little input VAT and no large investment coming. | You reclaim VAT each year, or you are about to invest. |
| Customers | They cannot deduct VAT. A price without VAT is lower for them. | They are businesses and deduct VAT. The VAT does not raise their price. |
| Returns | You do not want the ordinary VAT return. An occasional return can still be required. | You accept the return, because the deduction is worth more. |
What the hours test is
The hours test belongs to income tax, not to the VAT scheme. You usually meet it if you spend at least 1,225 hours on your business in the calendar year, and more time on the business than on other work, such as a job. If you were not an entrepreneur in one of the five preceding years, only the 1,225 hours apply.
- If you start or stop during the year, you may not pro-rate the 1,225 hours. You still have to reach them in the shorter period.
- Quotes, bookkeeping and your site count. Hours you are only on call, without working, do not. Hours in a job do not.
- You make the hours plausible with a diary, quotes, timesheets and invoices.
- The self-employed deduction in 2026 is €1,200 if you have not reached state-pension age at the start of the year, and half of that if you have. The deduction requires the hours test and cannot exceed the profit, except with the starter deduction.
- In disability there is a reduced test of 800 hours, only for the starter deduction in disability. That is not the ordinary threshold.
Not personal advice. Whether you stay in the scheme, and whether you reach 1,225 hours, is something to take to the intake or to your adviser.
Questions on this topic
Is the €20,000 including VAT?
No, while you are not in the scheme. Turnover then excludes VAT. Once you are in, you may not charge VAT and turnover is the amount on the invoice.
What if I cross the line in October?
You deregister at that moment. The supply or advance that takes you over €20,000 is fully subject to VAT. The exemption does not wait until 1 January.
Can I choose again every year?
No. After you leave you can rejoin only when the exclusion period has ended: the rest of the calendar year you left, and the following year.
Does a job count towards the 1,225 hours?
No. Hours in employment do not count. You usually also have to spend more time on the business than on other work, unless you were not an entrepreneur in one of the five preceding years.
Do 1,225 hours automatically give me the self-employed deduction?
Only if you are also an entrepreneur for income tax. In 2026 the deduction is €1,200 before state-pension age, and €600 if you had already reached that age at the start of the year. It cannot exceed the profit, unless you get the starter deduction.
This is a general explanation, not advice for your situation. DT Admin’s fees are indications excluding VAT.