KOR (Kleinondernemersregeling) one of the tax incentives for entrepreneurs with a small income will change from next year. The current state of affairs will last until January 1 of the next (2020) year. At the same time, in order to use this benefit in the future (2020) year, you must report this to the tax office before November 20, 2019.
What is KOR?
KOR is an opportunity for entrepreneurs with a small income not to pay BTW at all or reduce its amount.
Until now, the following rule was in force: if, according to the results of the year, the entrepreneur had to pay less than € 1.883 BTW, he could either reduce the amount of tax or not pay it at all (if he was paid less than € 1.345).
This could only be used by private entrepreneurs, or individuals working as part of a community or VOF, who have obligations to pay BTW, whose businesses are registered in the IP.
What will change from 2020?
- Not only private entrepreneurs, but also legal entities - all those who have an obligation to pay BTW will be able to get exemption.
- The basis for its receipt will now be the annual turnover (no more than 20).
- Only the exemption will be eligible, not the tax rebate.
At the same time, those who now have an exemption from BTW will automatically be included in the new KOR lists. The tax office will notify about this by letter, which, among other things, will describe how to refuse such an exemption, if you need it.
What are the benefits of not paying BTW?
- You don't have to show invoices.
- If you nevertheless invoice, you do not have to include BTW on it. If specified on the BTW invoice, the exemption is automatically canceled.
- You do not need to file BTW returns.
- You should only keep your purchase invoices for 7 years. For real estate and rights to it, the storage period is 9 years after the year of commissioning.
But besides the advantages, there are always disadvantages:
- You will not be able to return BTW, which you pay when purchasing goods necessary for your business. That is, if you pay more BTW than you get with your turnover, you cannot return this difference. This disadvantage will especially hit those whose business requires large investments.
- In some cases, you will still need to file a BTW return. You can check if you qualify for this requirement here: hulpmiddelIncidentelebtw-aangifte.
The BTW waiver can be canceled if your situation changes. And, of course, you can voluntarily refuse it.
You can clarify whether you are eligible for the new BTW exemption rules on the tax website at: GadanzelfnaofumeekuntdoenmetdenieuweKOR.
Thus, in most cases, the use of this new rule for exemption from BTW will be of interest to those entrepreneurs who, according to the result of the year, have to pay extra tax. Those who have the opportunity to receive a BTW refund will lose the right to it.
If you are not sure which to choose, it is best to consult with a tax advisor or accountant.
Nalog.nl, in turn, will be happy to help you decide. We are interested in making your business successful!
