VAT and hours
The small-business scheme is a VAT exemption up to €20,000 of turnover a calendar year. The hours test is different: at least 1,225 hours for the self-employed deduction in income tax. One decides the VAT on your invoice. The other decides a deduction in your return.
Your business is in the Netherlands and turnover is not more than €20,000 in the year you register and the year before. You then charge no VAT, file no VAT return and deduct no VAT on costs. The scheme applies to a sole tradership, a VOF and also a BV.
You spend at least 1,225 hours on the business in the calendar year, and usually more time on it than on other work. If you were not an entrepreneur in one of the five preceding years, only the 1,225 hours apply. In 2026 the self-employed deduction is €1,200 before state-pension age.
Stay in the scheme if turnover stays stably under the line and you have little VAT on costs. Leave if you invest, reclaim VAT, or will reach the line. After you leave you cannot rejoin at once: the rest of that year and the following year are closed.
| Situation | Lean towards staying | Lean towards leaving |
|---|---|---|
| Turnover | Stable at or under €20,000. | You reach the line, or turnover crosses it from year to year. |
| VAT on costs | Little input VAT, no large investment. | You reclaim VAT, or you are about to invest. |
| Customers | They cannot deduct VAT. | They are businesses and do deduct VAT. |
This is a general explanation, not personal advice. Whether you stay in the scheme is something to take to the intake or to your adviser.
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