What the scheme involves
The small businesses scheme is a turnover-based exemption. Stay below € 20,000 in turnover per calendar year and you may choose to stay outside VAT altogether: you charge your customers no VAT, you file no returns in principle, and your administrative burden drops considerably.
The flip side is that you no longer get the VAT on your own costs back. For a service provider with few purchases that is often favourable; for someone who has just bought a van or a stock of goods, almost never. The scheme is a choice, not automatic, and you register for it with the Tax Administration.
What changes in your records
VAT disappears from nearly everything: no more VAT column on your sales invoices, purchase invoices, receipts and bank entries, and no VAT return in your reports. Sales invoices charge no VAT and carry the statutory exemption note.
The VAT on what you buy is no longer deductible and therefore belongs in your costs gross. An invoice of € 121 is € 121 of cost to you, not € 100 of cost plus € 21 to reclaim. That shifts your cost base noticeably, and it is why the calculation is worth doing before you register.
The exception that gets missed most often
The reverse-charge mechanism applies even without VAT liability. Buy a service from a supplier abroad — a hosting subscription, software, a subcontractor who reverse-charges to you — and the VAT has been shifted to you. You must declare and pay that VAT, and you may not reclaim it as input VAT.
This means that under the scheme you may still have to file a VAT return: one showing only the reverse-charge boxes and the amount payable, with the turnover boxes and input VAT left empty. For goods — not services — an acquisition threshold of € 10,000 per year applies.
What happens if you cross the threshold
If you exceed € 20,000 during the year, the exemption lapses from the supply that crosses the line. From that moment you charge VAT again and file ordinary returns. Turnover before that point stays exempt.
So it pays to keep measuring your turnover against that threshold during the year rather than discovering it afterwards. Accounting software that tracks your cumulative turnover against the € 20,000 makes the difference between switching in time and correcting after the fact.
Updated August 25, 2026. General explanation of the Dutch rules, not tax advice — for your own situation, decide together with your accountant or the Dutch Tax Administration.