On Budget Day (Prinsjesdag, 16 September 2025) the Dutch Cabinet presented their new tax plans. As the Cabinet is currently governing in a caretaker capacity, no particularly groundbreaking proposals were expected.
In this article, we list a number of measures that are of particular relevance to an international audience. We have included several urgent points of attention stemming from previously approved legislation.
Please note: most of the topics mentioned below have yet to be discussed and approved by the Dutch House of Representatives and the Senate. Additionally, elections for the House of Representatives are scheduled for the end of October. The proposed plans will not be voted on until after elections. The measures may therefore be subject to change. Be sure to discuss the consequences of the proposed legislation with your Baker Tilly tax advisor.
Measures for everyone
The tax rates and brackets in Box 1 (income from work and home) of the Dutch Personal Income Tax (PIT) are to be adjusted. In 2025, the tax & social premiums rates led to a combined tax rate of 35.82% for the box 1 income up to € 38,441. This will rise to 35.7% and € 38,883. Income between € 38,441 and € 76,817 is taxed at 37.48% in 2025, set to increase to 37.56% and upper bracket limit of € 79,137. The top-rate remains 49.50%, applicable to income over this upper bracket limit.
The tax rate in the higher bracket of Box 2 (income from substantial shareholding) was lowered from 33% in 2024 to 31% in 2025 and remains the same in 2026. The tax rate for the lower bracket continues to be 24.5%.
The situation regarding Box 3 (income from savings and investments) remains complicated. In a nutshell, there is currently a kind of dual system, in which a notional yield is taxed, unless the taxpayer demonstrates that the actual yield was lower. In that case, the actual yield is taxed. A new system has been postponed several times and is now anticipated for introduction in 2028.
On Budget Day, minor repairs to the current system (and to the counterevidence rules) were presented. These included adjusted valuation rules for real estate, changes to tax treatment of ‘green investment’ schemes and measures to repair a tax leak regarding bonds.
Several changes to Dutch gift tax and inheritance tax have been proposed. These include changes to property valuations and new rules for the matrimonial property regime.
Businesses, entrepreneurs and director-major shareholders
The corporate income tax rate remains unchanged: 19% on the first € 200,000 of taxable profits and 25.8% on the excess. Several previously published changes to the business succession scheme are set to apply from next year.
One major change concerns the Carried Interest Scheme (lucratiefbelangregeling). This is a form compensation by means of share-participation in businesses, which is often offered (upper) management in for example the Private Equity sector. Several measures have now been proposed to increase taxation of such interests.
Additionally, we note that recent case law has confirmed that a taxpayer with a 30%-ruling, who opts for treatment as partially non-resident taxpayer, may well see a carried interest in an entity established abroad taxed in the Netherlands as Box 1 income.
As the carried interest scheme is often a complicated matter and the possible consequences are dependent on the specific details of a situation, you are advised to reach out to your tax advisor if you have any questions.
Pillar 2 and DAC9
The Minimum Tax Act 2024 was introduced last year, as implementation of the international Pillar 2-initiative. These rules are aimed to ensure that the profits of large multinational groups are taxed at an effective tax rate (ETR) of 15% all over the globe. To calculate this ETR, a (corrected) tax burden is divided by the corrected profit. If the result is lower than 15%, a top-up tax is applied.
This Act was implemented based on a European Directive, in turn based on OECD Model Rules, and aims to ensure that the profits of large multinational groups are taxed at an effective tax rate (ETR) of 15% all over the globe. After the publication of the OECD Model Rules and the European Directive, the OECD published ‘Administrative Guidances’ several times, containing explanations as well as further rules. In aid of worldwide consistency (in as far as possible), these rules are to be included in national legislation. This year’s Tax Plan contains a further update of the Dutch legislation.
The Pillar 2 rules also obligate certain businesses to file local information returns, detailing certain financial matters. The Netherlands is set to implement the European DAC9 Directive to streamline this process. Shortly put, this will allow businesses to file one central return, rather than multiple local returns, and the information may be exchanged within the European Union.
CBAM simplifications
Several simplifications were recently introduced for the Carbon Border Adjustment Mechanism (CBAM), a European effort to combat carbon leakage. These include new minimum thresholds. If you are involved in the import of products covered by CBAM, please discuss the impact of these rules with your tax advisor.
Real estate and RETT
The real estate transfer tax (RETT) was already set to be lowered from 10.4% to 8% for residences (homes that are not the owners’ main residence, such as holiday homes or rented out residences) as of 1 January 2026.
A new legislative proposal was recently introduced, to lower this specific tax rate even further, from the proposed 8% to 6%. It is expected that this proposal will be voted upon later this year. The tax rate for the acquisition of a main residence (‘own home’) remains 2%.
Further transitional measures have been announced for certain mutual funds or funds for joint account (fonds voor gemene rekening or ‘fgr’). This should offer better transitional rules for these funds, which are often used as a vehicle in real estate investments, before new changes in 2027.
VAT-related changes
A number of other VAT-related changes have been presented, either as part of the 2026 Tax Plan or as a result of previously introduced legislation. This includes:
-The previous abolishment of reduced VAT-rate for art, culture and sports will be cancelled. The tax rate was set to increase from 9% to 21% for certain supplies, as of 1 January 2026. However, budgetary room was found earlier this year, so the abolishment will be reversed.
-The lower VAT-rate for short stays was also abolished. This abolishment was approved last year, meaning the VAT-rate will increase from 9% to 21% for certain supplies, as of 1 January 2026. Some minor transitional legislation has now been proposed, to cover matters such as 2026 short stays that were booked in 2025. Please note: a legislative proposal is pending, aimed at reversing this abolishment too. If that proposal is approved later this year, the VAT-rate on short stays would remain 9%.
Transitional law for expats soon to end
Although not a part of this year’s Tax Plan, it is worth noting that the possibility to opt for non-resident taxpayer status was abolished in 2024, and the remaining transitional exception for certain pre-existing cases will end ultimately on 31 December 2026. Additionally, the transitional phase for 30%-rulings capped at the so-called WNT-norm will end on 1 January 2026 as well. Please speak to your tax advisor if you or your staff members require any assistance in dealing with these matters.
COLA no longer tax-free
Expats and foreign workers temporarily in the Netherlands, who do not apply the 30%-ruling, may be paid a tax-free reimbursement of certain extra-territorial expenses. The commonly used ‘cost of living allowance’ (often referred to as ‘COLA’), a reimbursement for the increased cost of living in the Netherlands compared to the employee’s country of origin, may be reimbursed free of wage tax. It has been proposed that these expenses, along with certain telephone expenses, may no longer be reimbursed tax-free.
Please note: as of 1 January 2027, the 30%-ruling is to become a 27%-ruling. The maximum tax-free reimbursement is 27% of the taxable wages for the full duration of the ruling (with the aforementioned cap at the WNT-norm). The minimum wage requirements will be increased as well. Transitional law applies: employees with a 30%-ruling applied prior to 2024 maintain their eligibility for a 30% tax-free reimbursement for the duration of the ruling. The applicable minimum wage amounts will not be increased for employees with a 30%-ruling applied prior to 2025 (other than the normal annual indexation).
Self-employed persons (ZZP): no final clarity
Whether a self-employed person without staff (‘ZZP’er’) is in fact a ZZP’er or an employee, is often debatable. This distinction is relevant for matters such as taxation, social security and labour law. Until recently, an enforcement moratorium applied, except for exceptional situations. However, the employment status of ZZP‘ers is under scrutiny and false self-employment may lead to penalties and additional taxes.
It was expected that a new system, the so-called ‘VBAR’ would enter into force in 2026. However, despite developments and draft legislation, it is unclear whether the VBAR (or any other new ZZP-legislation) will pe implemented this year.
Innovative start-ups & scale-ups and taxation
Several measures have been proposed to facilitate employee participations (e.g. share options) in innovative start-ups and scale-ups. Shortly put, these measures aim to facilitate the issuing of such shares without this leading to immediate taxation and cashflow problems.
Additionally, measures are discussed for a favourable treatment of these shares in Box 3, under the new (2028) method of taxation.
If you are interested in employee participations, please reach out to your tax advisor for more information.
Mobility
Dutch legislation has many rules regarding company cars. Our experts previously outlined the main rules for 2025 in the brochure ‘Tax treatment of a company car’. One of the obligations concerns detailed reporting on work-related mobility. It has been suggested that the reporting obligations for work-related personal mobility should be simplified, by increasing the threshold from 100 employees to 250 employees. Additionally, new measures to encourage emissions-free fleets have been proposed. Under this legislation, non-zero-emission cars made available to employees will face a final levy (at the expense of the employer) of 12% of the list price (or market value, in the case of cars older than 25 years). If approved, this legislation will enter into force as of 1 January 2027. Transitional law applies for most cars made available before that time. Please note: all transitional law is expected to end on 17 September 2030. Be sure to discuss the far-reaching consequences of this proposal with your tax advisor.
The debate continues
In this article, we have provided a brief overview of several upcoming tax proposals and changes in the Netherlands. A more detailed overview is available, in Dutch, here.
Please note that most of the measures and proposals mentioned above are currently still being debated. The proposals have yet to be approved by the Dutch House of Representatives and the Senate. There are also measures on the table that we have not mentioned in this article. Given the caretaker Cabinet and the upcoming general elections, it is possible that the plans may be amended or even stricken off altogether, in the course of the parliamentary debate over the next several weeks.
Please be sure to seek professional advice before acting on any of the proposed measures. Our tax advisors would be happy to discuss any developments and the potential impact of these measures on your tax position.
The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.
