2027 Dutch Budget – Tax Proposal

On 15 September 2026, the Dutch government published its tax proposals for 2027 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  

• Box 3: postponement of the current proposal 
• Changes to the tax treatment of foreign exchange results under the participation exemption  
• Abolition of the non-business-purpose presumption in the business merger and demerger facilities  
• Dividend withholding tax refund for Dutch investors in foreign investment funds 
• Reduction of the general real estate transfer tax rate for residential property  
• Tax incentives for start-ups and scale-ups  
• Introduction of new safe harbour rules under the Minimum Tax Act 2024 

 

PERSONAL INCOME TAXES  

Box 3: postponement of the current proposal 

The future of the Dutch Box 3 regime remains uncertain. The current legislative proposal pending before the Dutch Senate would introduce taxation based on actual returns as of 1 January 2028, with most investments taxed on an accrual basis, including both realized and unrealized gains and losses. 

In September 2026, media reports suggested that the coalition parties were also considering alternatives, including a more direct transition to a capital gains tax system under which taxation would generally take place upon realization. However, on 11 September 2026, the Dutch government confirmed that no political agreement had been reached before Budget Day and that no concrete legislative amendment would be included in the Budget Day package. 

The government indicated that all potential scenarios involve significant budgetary and implementation consequences and differ in their effects on taxpayers and the Dutch investment climate. Discussions with the House of Representatives and the Senate will continue, with a further proposal expected within six months, potentially as part of the Spring Memorandum 2027. 

 

CORPORATE INCOME TAXES 

Changes to the tax treatment of foreign exchange results under the participation exemption

The Dutch government proposes amending the treatment of foreign exchange results on instruments used to hedge the currency exchange risks relating to exempt participations. Under the current rules, where the relevant conditions are met and the taxpayer has made a request, the currency exchange results on such a hedging instrument may fall within the scope of the participation exemption. As a result, any foreign exchange gain is exempt, whilst a foreign exchange loss shall be non-deductible. 

For financial years starting on or after 1 January 2027, only the non-priced-in currency exchange result on a qualifying hedging instrument should fall within the scope of the participation exemption. The priced-in component of the foreign exchange result should, however, be included in the taxable profit. Broadly speaking, the priced-in component reflects the foreign exchange movement already reflected in the pricing of the hedging instrument when that instrument is entered into, whereas the non-priced-in component reflects the difference between the expected currency movement and the actual currency movement. The measure is intended to remove an asymmetry under which, for example, a higher interest expense on a foreign currency-denominated  loan may be deductible while the corresponding expected foreign exchange gain is exempt. 

The proposal also contains transitional rules for existing hedging instruments. In particular, the existing rules may continue to apply through 31 December 2027 to certain hedging instruments entered into prior to 15 September 2026 in case they were already within the scope of the participation exemption, or in respect of which a complete request for application of the participation exemption had been submitted before that date.

Abolition of the non-business-motive presumption in the corporate merger and demerger facilities 

The government proposes to abolish the statutory presumption of non-business motives in the Dutch corporate income tax facilities for corporate mergers and demergers. Under the current rules, if shares in a demerged or acquiring legal entity are disposed of within three years, there is a rebuttable presumption that the reorganization was not based on business motives and was predominantly aimed at avoiding or deferring taxation.  

The Dutch Supreme Court ruled on 27 February 2026 that this presumption in the demerger facility is contrary to the EU Merger Directive. The government therefore proposes to abolish the presumption both for demergers and for corporate mergers, where an almost identical rule applies. As a result, the burden will in these situations shift to the tax inspector, who must provide at least an initial indication that business motives are absent or that tax avoidance or deferral is involved. The tax authorities would retain the ability to deny the reorganization facility where tax avoidance or deferral can be established. The measure is proposed to take effect on 1 January 2027. 

 

DIVIDEND WITHHOLDING TAX 

Refund scheme for Dutch investors in foreign investment funds 

A refund scheme is introduced for Dutch residents that are entitled to dividends from entities based in the Netherlands through foreign investment funds. The proposal follows a Dutch Supreme Court judgment concerning the dividend withholding tax refund scheme available to Dutch fiscal investment institutions (FBIs). The Supreme Court held that, under EU law, Dutch-source dividends received through a foreign investment fund and subsequently distributed to a Dutch investor may not be subject to a higher Dutch tax burden than comparable dividends received through a Dutch FBI.  

The proposed refund scheme is intended to codify this ruling. The refund will generally be calculated based on the Dutch dividend withholding tax attributable to the Dutch investor. Investors may also claim a refund if they can show that the Dutch tax burden on dividends received through a foreign investment fund is higher than it would have been if they had invested through a Dutch FBI. For Dutch corporate investors, the refund cannot exceed the amount of Dutch corporate income tax that would have been payable. 

The statutory refund scheme is proposed to apply to Dutch dividend withholding tax withheld from 1 January 2027.

 

REAL ESTATE TRANSFER TAX (RETT) 

Reduction of the general RETT rate for residential property 

The RETT rate applicable to residential properties that the acquirer will not use as their principal residence (hoofdverrblijf) on a long-term basis will be reduced from 8% to 7% with effect from 1 January 2027. This includes, among other things, residential properties acquired for rental purposes, investment purposes, or as holiday homes.

Through this rate reduction, the government aims to make investment in the housing market more attractive and to lower the financial threshold for the acquisition of rental properties.

The reduction applies exclusively to residential properties. For non-residential real estate, such as office buildings, industrial premises and retail properties, the general RETT rate of 10.4% will remain applicable.

 

WAGE TAX AND PERSONAL INCOME TAX 

Tax incentives for start-ups and scale-ups 

A separate legislative proposal introduces a more favourable tax treatment for employee share options granted by qualifying start-ups and scale-ups. The proposal is intended to make it easier for these businesses to attract and retain employees by bringing the Dutch taxation of employee equity participation more closely in line with regimes in other European start-up jurisdictions.  

The proposal contains two principal changes. First, only 65% of the benefit derived from qualifying share options would be included in the wage tax base. This is a reduction of the taxable base rather than a separate tax rate. Second, as a general rule, taxation would be deferred until the shares acquired through exercise of the options are actually sold. This is intended to address the liquidity problem that may arise where tax becomes payable before an employee has received cash proceeds from the shares. The government aims for these measures to take effect from 1 January 2027.  

Access to the regime requires the employer to qualify as a start-up or scale-up. Broadly, the business must have a scalable and repeatable business model resulting from innovation, with the Netherlands Enterprise Agency (RVO) determining qualification upon application. Foreign companies may also apply. Additional requirements apply to the share options, including a general requirement that the options or resulting shares may not be disposed of within two years of the grant date, subject to exceptions including an earlier sale or IPO of the company.  

An amendment to the definition of start-ups for purposes of the proposed future Box-3 regime, which had previously been announced as part of this legislative proposal, is not included in the legislative proposal submitted on Budget Day. The government states that it requires additional time to decide on the future design of Box 3.  

 

GLOBAL MINIMUM TAX 

New safe harbour rules under the Minimum Tax Act 2024 

The government has submitted a separate legislative proposal to implement the safe harbour rules agreed upon as part of the OECD/G20 Inclusive Framework's 2026 Side-by-Side package in the Dutch Minimum Tax Act 2024. The proposal addresses four safe harbours: the Simplified Effective Tax Rate Safe Harbour, the Qualifying Equivalent Minimum Tax System or Side-by-Side Safe Harbour, the Ultimate Parent ("UPE") Entity Safe Harbour and the Substance-based Tax Incentive Safe Harbour. The proposal also extends the qualifying Country-by-Country Reporting safe harbour by one year.  

The Simplified ETR Safe Harbour is intended to allow multinational groups to avoid a full Pillar Two top-up tax calculation for a jurisdiction where simplified metrics establish that there is no risk of additional top-up tax. The other safe harbours address, respectively, jurisdictions with qualifying tax systems that are treated as equivalent to the global minimum tax framework, groups whose ultimate parent is located in a jurisdiction with a qualifying domestic tax system (currently only the United States), and qualifying expenditure- or production-based tax incentives linked to substantive economic activity.  

The bill is proposed to enter into force on 1 January 2027, but several provisions would apply retroactively in order to align the Dutch rules with the internationally agreed application dates. The Simplified ETR Safe Harbour would apply to financial years beginning on or after 31 December 2025, while the Side-by-Side Safe Harbour, UPE Safe Harbour and Substance-based Tax Incentive Safe Harbour would have retroactive effect to 1 January 2026. The temporary CbCR safe harbour would be extended so that it can also apply to financial years beginning on or before 31 December 2027 and ending before 1 July 2029.