Temporary transitional rule for funds for joint account

As of 1 January 2025 the definition of the fund for joint account (fonds voor gemene rekening, fgr) was amended. This led to certain investment funds, in particular partnerships, which were previously fiscally transparent, becoming in principle separately liable to tax as of 1 January 2025 if they meet the (new) fgr conditions. The separate tax liability does not apply to funds whose participations can in principle only be transferred back to the fund itself (redemption funds). A transitional measure already exists under which funds were given until 1 January 2026 to effect conversion into a redemption fund under conditions.Because problems have nonetheless been reported, a temporary transitional rule is now also proposed, pending a possible new definition of the fgr. Under the proposed transitional rule entities that would have become liable to tax in the Netherlands as of 1 January 2025 and that qualified as transparent on 31 December 2024, may under conditions opt to remain fiscally transparent and therefore temporarily not be classified as fgrs. This prevents brief separate tax liability in this specific situation. Any change to the fgr definition will take effect at the earliest on 1 January 2027. The transitional rule applies until that new definition comes into force, but at the latest until 1 January 2028.

Introduction of aggregation rule for maximum investment amount for the energy investment deduction

With respect to the energy investment deduction (EIA), the cabinet proposes to introduce a statutory aggregation rule. A situation may arise in which taxpayers make energy investments both in their own business and in an enterprise that is part of a joint venture. Without an aggregation rule this can lead to more than €151 million (amount for 2025) of energy investments being taken into account for the EIA. Therefore, as of 1 January 2026 an aggregation rule will be introduced to prevent this unintended effect. This means that per taxpayer per year, regardless of whether the energy investment concerns the taxpayer’s own business or an enterprise that is part of a joint venture, a maximum amount of €151 million of energy investments can be taken into account for the EIA.

The income policy

The cabinet wants to make work more rewarding and for that reason is investing in an increase of the employment tax credit (arbeidskorting). This will be financed by a rate increase in the first bracket of wage tax and income tax. In this way the purchasing-power development of workers will be brought closer to that of benefit recipients.
In addition, inflation in 2026 will be only partially (52.8%) compensated by an increase in bracket thresholds and tax credits. The limited application of inflation correction also affects the ceilings in the small-scale investment deduction (KIA), the maximum amounts for green investment and cash, the assessment and refund thresholds and the highest threshold of the owner-occupied property value for the imputed rental value (eigenwoningforfait).

Adjustment of rate structure box 1
 

The rates in box 2 (first bracket 24.5% and second bracket 31%) and box 3 (36%) remain unchanged.

SME profit exemption and self-employed allowance

The SME profit exemption will remain in 2026 at 12.70%. The self-employed allowance (zelfstandigenaftrek) will be further reduced to €1,200 in 2026. In 2025 this allowance still amounts to €2,470.

Measures for indirect held lucrative interest regime

Advantages from an indirectly held lucrative interest (middellijk gehouden lucratief belang) can at the taxpayer’s request be taxed in box 2 instead of as result from other activities (ROW) in box 1. The condition is that at least 95% of the lucrative-interest advantages enjoyed in a calendar year are paid out as income from a substantial interest. The cabinet proposes to broaden the tax base for income from an indirectly held lucrative interest by applying a multiplier. This increases the effective tax burden on those advantages from 24.5% to 28.45% for lucrative-interest advantages taxed in the first rate bracket of box 2 and from 31% to 36% for advantages taxed in the second rate bracket of box 2. This measure is not limited to lucrative interests held by private equity managers but extends to all qualifying interests.

Adjustment of the deemed return for other assets in box 3

The cabinet proposes to modify the calculation method of the deemed return (forfait) for other assets in box 3 and to lower the tax-free allowance, in order to offset the budgetary shortfall resulting from the postponement of the introduction of the Actual Return Box 3 Act (until 1 January 2028). The deemed return for other assets increases by 1.78 percentage points to 7.78% and the tax-free allowance is lowered from €57,684 to €51,396.

Excluding non-market-conform dealings between related parties from application of the vacancy-value ratio For properties let to a related party of the taxpayer where the tenant enjoys tenancy protection but the rent or lease price is not market-conform, as of 1 January 2026 the vacancy-value ratio (leegwaarderatio) can no longer be applied. This applies both for income tax and for gift and inheritance tax. In addition, a Supreme Court ruling is codified under which the market value replaces the value determined using the vacancy-value ratio if the latter yields a value more than 10% higher.

Repair of box 3 rebuttal regime for bonds and other assets with short maturities

With retroactive effect to 25 August 2025, 16:00, the calculation of the actual return in the box 3 rebuttal regime with respect to bonds will be adjusted. Bonds and bond-like securities will henceforth be valued at market value. This is the value including accrued interest, which was previously not the case. It is also proposed to abolish the exemption for short maturities (excluding bank deposits), so that accrued interest will no longer be exempt. This combination of measures ensures that the actual return on these assets is distributed more evenly across tax years.

Adjustment for green investments

For technical reasons the box 3 exemption and the tax credit for green investments cannot be abolished as of 1 January 2027. However, the cabinet proposes a very small exemption amount for green investments of €200 per taxpayer so that in practice the schemes will be abolished as of 1 January 2027. The exemption and tax credit for green investments will be definitively abolished as of 1 January 2028.

Tightening of the extraterritorial costs (ETC) scheme

Employers may reimburse extraterritorial costs (ET costs) of temporary residence outside the country of origin tax-free in the context of employment. The cabinet proposes to tighten this ETC scheme. The tightening means that from 2026 the extra costs for subsistence, including costs for gas, water, electricity and other utilities, will be excluded from tax-free reimbursement or provision as ET costs. Also, telecommunication costs for private calls to the country of origin will be excluded from ET costs from 2026.

The cabinet considers it desirable that the ETC scheme only applies to ET costs that are directly related to the employment relationship and are not already reflected in the level of the employee’s salary. The cabinet also states that the tightening of the ETC scheme aligns with a more targeted labour migration policy, although the expected impact is limited.

For employees who are seconded abroad by a withholding agent (posted employees), the possibility to receive the extra subsistence expenses and telecommunication costs for private purposes tax-free will remain.

The expatriate scheme will not be tightened further than the previously enacted reduction from 30% to 27% as of 1 January 2027. This responds to the desire of Dutch business to keep the expatriate scheme stable.

Pseudo-final levy for non-emission-free company cars

To make the passenger car fleet more sustainable and to meet the Netherlands’ climate targets, the cabinet has decided to introduce a pseudo-final levy at a rate of 12% on the value of company passenger cars provided by employers to their employees that run on fossil fuel. A distinction is made between passenger cars that the employer also makes available for private use, including commuting, and passenger cars made available solely for business use. For fossil-fuel passenger cars made available exclusively in the context of business operations the pseudo-final levy does not apply. Light commercial vehicles are also not within the scope of the pseudo-final levy.

The pseudo-final levy will be due from 1 January 2027 for fossil passenger cars that from that date onwards are first made available by the employer also for private use. If an employer already made a passenger car available for private use to one of its employees before 2027, a transition period applies until 17 September 2030. After the transition period the pseudo-final levy will apply to all fossil passenger cars that are also made available for private use.

Clarification of the bicycle scheme

For the provision of (electric) bicycles that are also made available for private use, a taxable addition in wage tax applies. It is clarified that this addition will be set at nil when a shared bicycle is used privately on an incidental basis. This applies, for example, to hub, company, public transport and other types of shared bicycles used for commuting and other business trips.

It is proposed that the nil addition for a provided bicycle be applied with retroactive effect from 1 January 2020, being the date the bicycle addition first took effect. For provided bicycles that are not stored incidentally at the employee’s home or place of residence, a nil addition will also apply retroactively to 1 January 2020.

Making the RVU threshold exemption structural

The early retirement allowance (RVU) threshold exemption will be continued structurally with reference moments from 2026. The first reference moment is in 2028. To make the RVU more accessible for employees with low incomes or little supplementary pension, it is proposed to raise the current threshold amount (net equivalent to a net state pension) by €300 per month. It is also proposed to increase the rate of the pseudo-final levy on an RVU exceeding the RVU threshold exemption in steps: 57.7% in 2026, 64% in 2027 and 65% in 2028.

Start-ups and scale-ups

It is expected that as of 1 January 2027 a fiscal measure will be introduced in wage tax providing for a tax base reduction to 65% of income from employee stock options for employees of start-ups and scale-ups, which will flow through to box 1 taxation in income tax. This will make the effective taxation comparable to the situation where the stock options would be taxed in box 2. However, this measure is not part of the Tax Plan 2026 and will be submitted later to the House of Representatives in a separate bill.

Proposal on unequal fractional shares in matrimonial property

As of 1 January 2026 spouses who enter into a community of property with unequal fractional shares will, upon dissolution of the matrimonial property regime, be liable to gift or inheritance tax for the part that accrues to them in excess of half of that community. The same applies to a final or periodic settlement clause where assets are divided otherwise than equally. The motive of the spouses is not considered relevant. Transitional rules are provided: prenuptial agreements containing an unequal fractional-share community or a settlement clause with a division other than halves that were entered into before 16 September 2025, 16:00, are not covered by the measure. If spouses change their prenuptial agreement after 16 September 2025, 16:00 and the share in the matrimonial property or the assets to be settled changes, the new rules will apply to them from 1 January 2026.

Gifts within 180 days before death

Gifts that a deceased made within 180 days before his or her death are by fiction regarded as having been acquired by inheritance due to that person’s death. As a result of this provision these gifts are included not only in gift tax but also in inheritance tax, whereby any gift tax paid may be credited against the inheritance tax payable.

For simplicity the cabinet proposes to amend this provision so that in such cases there is no longer a gift but solely an acquisition by inheritance. This means that no gift tax return needs to be filed by the acquirer, the tax inspector no longer has to assess gift tax and it is no longer necessary to credit any paid gift tax against the inheritance tax. This measure takes effect on 1 January 2026 and will thus in practice apply for the first time to gifts that fall under this fiction that were made no more than 180 days before 1 January 2026.

Equalisation for gift and inheritance tax of biological children

The Supreme Court has ruled that in gift and inheritance tax no distinction may be made between children born inside or outside marriage, but left removal of the existing inequality to the legislator. The cabinet proposes an amendment by which a biological child is equated for gift and inheritance tax with a child who is in a familial legal relationship with the donor or deceased. A biological child will therefore fall under the definition of ‘child’ in the Succession Act 1956 and will be able from now on to use the same exemptions and rates as legal children. The child must however substantiate biological parentage by means of a DNA test.

Extension of start date for inheritance tax interest and filing deadline for inheritance tax

The statutory deadline for filing an inheritance tax return of eight months is experienced in practice as too short. Therefore it is proposed to extend this deadline to twenty months after death. The start date for the calculation of interest on inheritance tax will be aligned with this. This proposed term will first apply to deaths occurring on or after 1 January 2026.

Preservation of reduced VAT rate for culture, media and sport

The increase of the VAT rate on culture, media and sport from 9% to 21% included in the Tax Plan 2025 will be reversed. The reduced VAT rate on accommodation (short stay within the hotel, boarding house and holiday accommodation sector) will, however, be increased to 21% as of 1 January 2026. A motion by the Socialist Party (SP) to also withdraw this change was not adopted. Another motion by GroenLinks/PvdA to withdraw this change has been held in abeyance (no vote yet). The BBB supports this motion and will present a proposal during the parliamentary treatment of the Tax Plan 2026, arguing that research shows the expected tax yield is far from realised and that the increase has negative effects, especially in border regions.

Reduction in fuel excise duties

The temporary reduction in excise duty on unleaded petrol, diesel and LPG would have ended on 1 January 2026, but is again extended by one year until 31 December 2026. Also, there will be no indexation in 2026 so the excise duty rates remain unchanged. In return, the intended reintroduction of red diesel for agricultural vehicles will not proceed.

Excise duty on non-alcoholic beverages

A measure is proposed to prevent excise duty on non-alcoholic beverages being avoided by adding a small amount of dairy to soft drinks or fruit juices. The exemption for dairy and soy drinks will be reformulated from 2026 so that it will only apply to the purest dairy and soy drinks. Furthermore, the definition of the term ‘lemonade’ will be amended to ‘other non-alcoholic beverage’.

Rate reduction for vehicle tax for electric cars

The rate reduction for electric cars in the motor vehicle tax will be increased from 25% to 30% for the period 2026 to 2028. The cabinet wants to arrive at a more equitable levy with petrol cars, since electric cars are considerably heavier. In 2029 the rate reduction will again be 25%.

Tax credit for energy tax

Energy tax has a tax reduction in the form of a fixed amount that is annually deducted from the energy bill regardless of the user’s electricity or natural gas consumption. This so called tax credit amounts to €519.80 (excluding VAT) per qualifying connection in 2026, compared with €524.95 (excluding VAT) in 2025. On balance this is therefore a slight decrease.

Adjustment of the right of inspection

In the Tax Plan 2024 an amendment was adopted providing for a statutory right of inspection for citizens into their own tax file. The current design, however, creates operational problems for the tax authorities. The cabinet therefore proposes to abolish the inspection request and the decision by a notice subject to objection and to prescribe that the inspector proactively grants digital access to the case related documents at the latest upon notification of the tax assessment. The inspector may only refuse access to certain documents if confidentiality for compelling reasons is required. A taxpayer who believes his or her digital file is incomplete can raise this in objection or appeal against the underlying tax assessment or decision. However, the introduction of the right of inspection is not possible before 2032 and will be implemented step by step by designating national taxes by general administrative order. For taxes not yet designated, the inspector may on a discretionary basis grant access. The scheme will not for the time being apply to taxes of decentralised authorities.

Act on modernisation of electronic administrative traffic

From 1 January 2026 a large number of provisions of the Act on modernisation of electronic administrative traffic (Wet modernisering elektronisch bestuurlijk verkeer, Wmebv) will come into force. This guarantees that administrative bodies cannot compel citizens and businesses to use electronic means for official communications. At the same time it establishes the right of citizens and businesses to send such communications electronically to the administrative body. The Tax and Customs Administration will however be exempted until 1 January 2030 to allow for the necessary system adjustments.

Collection interest

The Budget Memorandum (Miljoenennota) notes that the percentage for collection interest will be fixed at 4.25% (2025: 4%). Thus there will be no link to the ECB main refinancing rate plus a margin, as is the case in the tax interest regulation. It is further noted that the tax interest percentage for corporation tax will not be reduced.