2026 Dutch Budget – Tax Proposal

On 16 September 2025, the Dutch government published its tax proposals for 2025 and onwards.

The following key changes have been proposed or will enter into force (if the legislative proposal has been submitted earlier or the amendment is already included earlier in legislation):

 

Key changes

• Lucrative Interest Scheme (lucratiefbelangregeling)
• Termination of the Partial Non-Resident Tax Liability (expatregeling)
• Changes to Box 3
• Measures to cover for expected budgetary shortfall Liquidation loss scheme (Liquidatieverliesregeling)
• Liquidation loss scheme (liquidatieverliesregeling)
• Temporary transparency election option for entities or funds qualifying as non-transparent FGR
• Carbon dioxide levy for industry pause till 2030
• Pillar 2/Minimum Taxation Act 2024 Technical adjustments
• 21% VAT on Short-Term Accommodation in the Hotel, Guesthouse, and Holiday Sector
• VAT Revision on Services Relating to Immovable Property
• Transfer Tax Rate for Residential Investment Properties

 

Personal Income Taxes

Lucrative interest scheme (lucratiefbelangregeling)

Often in private equity fund structures, investment professionals and managers receive what’s known as “sweet equity”. Typically it involves instruments that, due to leverage effects, can generate very high returns. They are used as an incentive to encourage managers to achieve better performance.

From a tax perspective, these types of instruments often fall under the lucrative interest regime (lucratief belangregeling).

In principle, income from lucrative interest is taxed in Box 1 (as regular income). However, a special provision allows this taxation to be shifted to Box 2 (income from substantial interest). To qualify, individuals must hold their lucrative interest through an entity and distribute at least 95% of the profits from such lucrative interest to themselves in the same financial year.

The Budget Plan adjustment introduces a higher tax rate within Box 2, specifically for income falling under this regime, resulting in an increase in the effective income tax burden from 24.5% to 28.45% for benefits from lucrative interests that are taxed in the first income bracket (up to EUR 69.470), and from 31% to 36% for the excess.

The Budget Proposal also reflects on the proposed reformed Box 3 (as referred to changes in Box 3) and already indicates that the adjustment mentioned above, might be of temporary nature and will potentially be aligned with this new Box 3 regime.  

Termination of the Partial Non-Resident Tax Liability (expatregeling)

As of 1 January 2026, the transitional arrangement for taxpayers who were already making use of the 30% ruling will expire. From that date onward, it will no longer be possible to opt for partial non-resident tax liability. This may for example have adverse consequences for the offering of stock options to employees who make use of this scheme.

Changes to Box 3

Effective 1 January 2026, significant changes will be implemented in the taxation of assets under Box 3. The deemed return for the category other assets (overige bezittingen) will be increased from 5.88% to 7.78%. At the same time, the tax-free allowance will be reduced from EUR57,684 to EUR51,396 per taxpayer.

These adjustments are part of a broader reform of the Box 3 system, through which the government aims to better align the fictitious return with actual returns. However, the new system based on actual returns has been postponed until at least 2028.

Taxpayers who achieve a lower actual return than the deemed percentage can continue to make use of the so-called counter-evidence scheme. This scheme allows individuals to demonstrate that their actual return is lower, which may result in a reduced tax assessment.

  

Corporate Income Taxes

Measures to cover for expected budgetary shortfall Liquidation loss scheme (Liquidatieverliesregeling)

On 21 March 2025, the Dutch Supreme Court issued a ruling concerning the liquidation loss scheme (liquidatieverliesregeling) in respect of an investment in a qualifying subsidiary (deelneming). The government anticipates that this decision will result in budgetary shortfall.

In response to cover for this shortfall, an increase of a particular social security contribution is proposed, but the Budget Day proposal also expresses the intention to amend the tax treatment of fx-results on a qualifying subsidiary (deelneming).

Liquidation loss scheme (Liquidatieverliesregeling)

On 21 March 2025, the Dutch Supreme Court issued a ruling concerning the liquidation loss scheme (liquidatieverliesregeling) in respect of qualifying subsidiaries. The government anticipates that this decision will result in a one-off budgetary shortfall of approximately EUR840 million and a structural shortfall of EUR65 million.

In response to cover for this shortfall, an increase of a particular social security contribution is proposed and the Budget Day proposal contains the intention to amend the tax treatment of fx-results on qualifying subsidiaries (deelnemingen).

Temporary transparency election option for entities or funds qualifying as non-transparent FGR

As a result of the changes in the Dutch entity classification rules as 1 January 2025, certain transparent entities or funds which fall within the new definition for Fund for Mutual Account (fonds voor gemene rekening)(FGR) qualify as non-transparent for Dutch corporate income tax purposes as of 1 January 2025. In order to avoid such undesired change, Dutch policy guidelines allowed for entities or funds to change their bylaws or fund conditions prior to 1 January 2026.

As it appears, in practice some entities or funds have difficulties to meet the 1 January 2026 deadline and, given that new changes in the definition of FGR are expected as per 1 January 2027, certain entities or funds are therefore allowed to opt to maintain a transparent status if they meet certain conditions. This prevents a potential situation where an entity of fund would change status (transparent or non-transparent) for Dutch corporate income tax purposes multiple times in a short timeframe. This temporary measure ends on 1 January 2028.

Carbon Dioxide Levy for Industry Pause till 2030

The CO₂ tax for industry is proposed to be paused until at least after 2030 by reducing the rate of this levy to effectively zero. Currently, the CO₂ tax in 2025 for ETS installations is effectively EUR21.14 per ton of CO₂ emitted, on top of the cost of a European emission allowance (ETS).

Pillar 2/Minimum Taxation Act 2024 Technical adjustments

The government has proposed several technical adjustments to the Minimum Taxation Act 2024, based on the OESO administrative guidelines published in December 2023. These adjustments concern detailed application of the act.

In addition, the DAC9 directive will be introduced. Under DAC9, tax filings within the EU will only need to be submitted once, replacing the obligation to report separately in each Member State. The Member State in which the filing is submitted will forward the relevant information to other affected Member States within three months. This approach eliminates duplicate reporting obligations and reduces administrative burdens. As a result, a centralized system is established within the EU, significantly streamlining the filing process.

 

VAT and Real Estate Transfer Tax

21% VAT on Short-Term Accommodation in the Hotel, Guesthouse, and Holiday Sector

Until now, a reduced VAT rate of 9% applied to such services. As of 1 January 2026, the standard VAT rate of 21% will in principle apply to short-term accommodation services provided within the scope of the hotel, guesthouse, and holiday accommodation sector.

VAT Revision on Services Relating to Immovable Property

Until now, (only) (re)construction alone triggered the start of a VAT revision period. This period (generally) spans 10 years from the date of first use. The concept of “revision” means that if the use of the immovable property changes within this period (for example, from VAT-taxed to VAT-exempt rental), the initial deduction of investment VAT must be adjusted. After the year of first use, this entails a correction of 10% per remaining year of the revision period. Thus, if on January 1 of the final year of the revision period the rental changes from VAT-taxed to VAT-exempt, the landlord would, in principle, be required to repay 10% of the initially deducted investment VAT to the tax authorities.

As of 1 January 2026, (substantial) investments in existing buildings may also trigger a new VAT revision period. This revision period will span 5 years. The scheme applies only to so-called “immovable investment services” with a value of at least EUR30,000 (excluding VAT).

Transfer Tax Rate for Residential Investment Properties

As of 1 January 2026, a special transfer tax rate will apply to residential properties. The rate is set at 8% and applies to properties that do not qualify as an owner-occupied dwelling, but are acquired, for example, as an investment. If you acquire a property in which you will reside permanently yourself, the reduced rate of 2% will continue to apply after 1 January.