Small Business Scheme (KOR) for Freelancers

KOR Small Business Scheme for Freelancers: What You Need to Know as a Freelancer Platform or Intermediary

Are you connecting freelancers with clients? Then you've likely come across the Small Business Scheme (Kleineondernemersregeling or KOR). Some freelancers are already registered for it, while others are still considering it. One key question freelancers often have when working through an intermediary or platform is: Does the platform take the KOR scheme into account?

In this post, we'll explain what the KOR scheme is, its pros and cons, and how Finqle’s services can help you attract small business clients.

KOR Smalll Business Scheme 2024: What Is It and How Does It Work?

Not all businesses are required to charge VAT. The KOR scheme offers a VAT exemption to businesses with a turnover of less than €20,000 per calendar year. This scheme is open to all types of businesses, including sole traders, partnerships, foundations, and private limited companies (BV). So, yes—this also applies to the freelancers you work with!

Applying for the KOR Scheme

Freelancers with modest incomes won’t be automatically enrolled in the KOR scheme—they have to apply for it. Once accepted, the freelancer will no longer need to charge VAT to their clients, but they also won't be able to reclaim VAT from the tax office. This simplifies their administration significantly.

Benefits of the  Small Businesses Scheme (KOR)

The KOR scheme offers a range of benefits, not just for freelancers but also for platforms and intermediaries:

• Simplified administration for both freelancers and their clients

• Competitive advantage for freelancers, as they can offer lower-priced services

• VAT exemption makes it easier to place small businesses in the market

Drawbacks of the KOR Small Business Scheme

However, the KOR scheme may also come with drawbacks, making it less advantageous for some freelancers or platforms:

• Freelancers cannot reclaim VAT on expenses or investments

• The scheme expires if the revenue cap is exceeded

• Clients cannot reclaim VAT, which might be a disadvantage for some businesses

• If a freelancer surpasses the revenue cap, administrative adjustments will be needed, affecting both clients and platforms

Is Your Platform KOR-Friendly?

As a platform or intermediary, you want to ensure that as many freelancers as possible can work with you, including those registered under the KOR scheme. Making freelancers feel welcome and understood is key. You'll need to be able to answer questions about the KOR scheme and provide solutions for every situation.

To start, familiarize yourself with the KOR scheme—resources from the Dutch Tax and Customs Administration are a great place to begin. Adding information about the KOR scheme to your FAQs, blogs, or apps can also be a helpful way to support freelancers. If you handle invoicing for freelancers, make sure to offer them the option to invoice without VAT.

How Finqle Services Can Help

As an intermediary or platform, you want to make things as easy as possible for your freelancers. Informing them about the KOR scheme, advising them on their options, and supporting their administration is just the first step. Allowing them to invoice without VAT via your self-billing system is the next. While this can save freelancers a lot of time, it can be time-consuming for you to manage.

This is where Finqle’s services come in. We offer fast payments and automated invoicing, even for freelancers working under the KOR scheme. This means you no longer need to worry about VAT, contracts, or invoicing. It’s seamless service for your freelancers, without the administrative hassle.