Tax Plan 2027 – summary of measures for SME entrepreneurs

Income policy
In 2027, the employment credit cap will be increased to EUR 5,929 – up from EUR 5,685 - as part of the purchasing power package. On the other hand, in 2027 the cap for the elderly person's tax credit will be reduced to EUR 1,993 - down from EUR 2,067. What’s more, the rates in the first and second income tax brackets will increase to 36.13% (2026: 35.75%) and 38.16% (2026: 37.56%), respectively. Strikingly, the 2027 income threshold above which the top rate of 49.50% applies remains unchanged compared with 2026 (EUR 78,426). The proposed rate structure is as follows:
 

In 2027, the rate in Box 2 will amount to 24.5% on income up to EUR 69,607 and 31% on the excess. At 36%, the rate in Box 3 will not change in 2027. The tax-free wealth threshold in Box 3 will amount to EUR 60,098 in 2027.

Freedom contribution
The statutory inflation adjustment was to be 2.6% for the year 2026. However, as part of the so-called freedom contribution this adjustment will only be applied in part (48%) in 2027. As a result, the table adjustment factor will be 1.01248 for 2027 and the first and second income tax bands, as well as various other bracket limits, exemptions and tax credits for income tax purposes, will thus be increased by a smaller amount than would be justified under the statutory inflation adjustment. This will have a budgetary impact of EUR 1.5 billion in 2027, an amount rising to EUR 3.4 billion in 2028. For businesses, the freedom contribution will take the form of an increase in the Invalidity Insurance Fund contribution (Aof-premie). However, that increase is not part of the 2027 Tax Plan.

Abolition of the forestry exemption
The government proposes to abolish the forestry exemption with effect from 1 January 2029. As a result, the exemption for benefits from forestry operations for income and corporate income tax purposes will lapse. Thus, from 2029 onwards, benefits from forestry operations for self-employed individuals and companies engaged in forestry activities will no longer be exempt from taxation under this exemption.

Phasing out of the business discontinuation relief and the co‑working partner’s relief
From 2027 onwards, the business discontinuation relief for income tax purposes will be decreased by 75% to EUR 908 (2026: EUR 3,630); the relief will be abolished entirely in 2030. The legislator argues that an evaluation has shown that the scheme no longer serves a legitimate objective. For the same reason, the co-working partner’s relief for income tax purposes will also be phased out. First, the deduction percentages will be significantly decreased in 2027, after which the scheme will be abolished entirely in 2030. The revenue will be used to finance the new wage tax scheme for start-ups and scale-ups.

Phasing out the tax relief for new companies
The government proposes to reduce the tax relief for new companies to EUR 10 – down from EUR 2,123 – with effect from 1 January 2027 and to abolish it entirely with effect from 1 January 2028. The scheme for arbitrary depreciation for business start-ups will be abolished, too, with effect from 1 January 2028. The tax relief for new companies in the event of incapacity for work will lapse on 1 January 2029. According to the government, the effectiveness of these schemes in stimulating entrepreneurship is only limited and they entail relatively high implementation costs.

Abolition of the deduction for specific health care costs
The government proposes to abolish the deduction for specific health care costs with effect from 1 January 2028. As a result, the associated allowance scheme (tegemoetkomingsregeling, or ‘TSZ’) will also lapse. No specific transitional law has been included for any negative personal allowance related to specific health care costs that were previously deducted. Hence, a subsequent refund or payment after 1 January 2028 for health care costs previously deducted will no longer lead to a negative personal allowance.

What’s more, the Coalition Agreement provides for the allocation of EUR 350 million to provide an allowance for the health care costs of the chronically ill. However, a decision on how these resources will be utilised has yet to be taken.

Acquisition price of a substantial interest in the event of a transfer of a registered office to the Netherlands
It is proposed that if a non-resident tax liability arises because a foreign company relocates its registered office to the Netherlands, the acquisition price should be based on the market value of the substantial interest. The aim is to prevent increases or decreases in value from the period prior to the Dutch tax liability being taken into account.

Box 2: Concurrence of an inherited substantial interest and excessive borrowing
Subject to conditions, ordinary income from an inherited substantial interest may be received within 24 months of the death without immediate Box 2 taxation. The acquisition price is reduced in this case, thus deferring the tax liability. The ‘Other 2027 Tax Measures’ Bill proposes to exclude this facility, with effect from 1 January 2027, in respect of notional regular benefits arising from excessive borrowing from one’s own company. This prevents the deferral of tax on these benefits and potential double taxation. Such double taxation may arise because the application of the facility reduces the acquisition price, while the excessive borrowing cap is not increased and the same excessive debt may be taxed again.

Start-ups and scale-ups
A new tax-favoured share option facility for employees of start‑ups and scale-ups is proposed. Start-ups or scale-ups are enterprises that use a scalable and repeatable business model resulting from innovation. A ‘scalable and repeatable business model’ is the capacity of an enterprise to achieve rapid revenue growth by using technology that leads to lower marginal costs and economies of scale. Innovation concerns technical renewal or significant functional improvement relative to the industry.

Whether an enterprise qualifies as a start-up or scale-up is determined by a decision of the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland, or ‘RVO’) upon the employer's request. The decision issued has, in principle, a validity period of eight years and may, upon request, be extended a maximum of three times, for five years each. The government opts to introduce a separate definition of start-up and scale-up and not to follow the criteria suggested by the European Commission that sets limits in relation to revenues or employees.

In the case of a qualifying start-up or scale-up, the benefit realised by the employee on the sale of the shares or profit‑sharing certificates acquired upon exercise of the options is taken into account as wages for only 65%. The following elements are relevant:

• If the employee so chooses, the levy may also take place upon exercise of the share option right or when the acquired shares become tradable.
• The reduction of the taxable base does not apply where there is a lucrative interest (lucratief belang) or a substantial interest (aanmerkelijk belang), nor does it apply upon disposal of the share option right itself.
• Furthermore, the option right may not be exercised for the first time earlier than two years after grant, unless there is an earlier sale or IPO of the withholding agent's enterprise.
• Share option rights granted on or after 17 April 2025 that have not yet been included in wage tax as at 31 December 2026, may qualify for the new scheme.
• If an employee who participates in a share option scheme leaves employment, this will not be regarded as a taxable moment. In that case too, taxation takes place at the moment the shares are disposed of. The employment benefit derived from the share option rights constitutes income from current employment, including the employment benefit arising from any increase in value after leaving employment.
• If the RVO decision expires and the (formerly) qualifying share option of a start-up or scale-up has not yet been realised, then upon eventual realisation the increase in the value of the option must be split into a qualifying part (65%) and a non-qualifying part (100%) for tax purposes.
• Anyone who leaves the Netherlands will, upon emigration, receive a protective assessment (conserverende aanslag) on the increase in value of the qualifying share options up to the moment of emigration. The government considers it appropriate to align as closely as possible with the deferral facility offered for share options in start-ups and scale-ups. Deferral of payment is therefore granted automatically for an indefinite period, and is terminated in whole or in part when liquid assets become available, or when another taxable moment occurs.

Specific exemption for industry-specific products
The specific exemption for industry-specific products will be abolished with effect from 1 January 2027. Under this targeted exemption, it was possible to specifically exempt the wage benefit relating to industry‑specific products up to a maximum of 20% of the market value, but not exceeding EUR 500 per calendar year. Two provisions relating to the taxation of industry-specific products will remain in force. One concerns the valuation, as this will continue to be determined based on the market value. The other regards a discount on industry-specific products for former employees, which will continue to be classified as compulsory final levy wage for the purposes of the work-related expenses scheme.

Tax-free travel allowance
The maximum tax-free travel allowance will be increased from EUR 0.23 to EUR 0.25 per kilometre, with retroactive force to 1 January 2026. This amounts to approximately EUR 0.30 per litre of fuel. The government is calling on employers to use this tax relief, so employees will actually benefit from it. The increase will also apply to the provision that deals with the date of receipt of the travel allowance. This way, a variable travel allowance that is less than or equal to EUR 0.25 per kilometre at the end of the year may continue to be set off at the end of the calendar year.

Maximum pensionable salary
The maximum pensionable salary will no longer be indexed from 2027 up to and including 2032. This likewise applies to the income used for the accrual of annuities. Up to and including 2032, this amount will be ‘frozen’ at EUR 137,800.

Youngtimers
Vehicles designated as ‘youngtimers’ that are also made available to an entrepreneur or employee for their private use, are subject to an alternative additional tax liability regime, i.e., 35% of the market value. With effect from 1 January 2026, the age limit for a vehicle to be designated as a ‘youngtimer’ has been set at 16 years as of 2026. From 1 January 2027, this age limit will be raised to 17 years and then to 20 years from 1 January 2028. The previously planned increase in the age limit to 25 years has thus been repealed.

Following an amendment adopted last year, the age limit was adjusted for the applicable additional tax liability percentage but not for the valuation basis. This is why it has been stipulated, with retroactive force to 1 January 2026, that the market value will be the valuation basis for cars exceeding the 16-year limit in 2026. Finally, the bill contains transitional law to ensure a smooth implementation of these amendments.

Pseudo final levy on fossil-fuelled passenger cars
The government proposes a number of exceptions to the 12% pseudo final levy on the list value for fossil-fuelled passenger cars that are also provided to employees for private use. This levy will enter into force on 1 January 2027. The exemptions relate to manual-gearbox, driving-school cars and replacement cars during the first fourteen days of each maintenance or repair period. The regular car, too, must then be available for private use.

Under the proposal, the transitional law for cars already provided by the same employer before 2027 will be extended until 31 December 2030. In addition, during the period when the transitional law applies, an exception will apply for a single period of up to seven consecutive days per car, employer and calendar year. If this limit is exceeded or the car is provided for more than once, this exception will lapse entirely. Another proposal is to exclude the car benefit from the tax base for the pseudo final levy on excessive severance pay in the event of concurrence.

Residential property rate
The rate of transfer tax on the acquisition of properties that do not serve as a principal residence – including properties intended for letting or holiday use – will be reduced from 8% to 7% with effect from 1 January 2027. The government aims to improve the investment climate in the rental market and thereby increase the supply of rental properties.

Abolition of the reduced rate for ornamental horticulture
The reduced VAT rate for the supply of ornamental horticulture products will be abolished with effect from 2028. Hence, these supplies will be taxed at the general VAT rate of 21 per cent.

Abolition of the reduced rate for hot-air balloon flights
The reduced VAT rate for hot-air balloon flights will also be abolished with effect from 2028. Hence, these passenger transport services will be taxed at the general rate of 21%.

Other passenger transport, such as public transport and taxis, will continue to be taxed at 9%. A transitional arrangement has been put in place to prevent the use of prepayments for application of the reduced VAT rate to hot-air balloon flights after 1 January 2028.

Outline policy letter on electronic invoicing and reporting
In a letter to Parliament, the government has set out a decree regarding electronic invoicing (e-invoicing) and digital reporting (e-reporting). For both domestic transactions between businesses and for most supplies to businesses in other EU Member States, e-invoicing will become mandatory from 1 July 2030. E‑reporting will be introduced in phases for transactions subject to an e-invoicing obligation: as at 1 July 2030 for cross‑border transactions and as at 1 July 2031 for domestic supplies.

Announcement of Immediate VAT Adjustment Act
Following a pre-consultation in 2024, the government appears to have the intention to amend the system for correcting errors and differences in VAT returns. An online consultation will be launched in the autumn about the Bill introducing the ‘Immediate VAT Adjustment Act’ (Wet direct aanpassen bij de omzetbelasting’). Based on the information from the pre-consultation, a three‑year review period will be introduced to replace the current six-week objection period. The aim of this longer period is to offer greater legal protection by allowing entrepreneurs to correct their returns for a period of three years. Based on the information from the pre-consultation, the period within which the Tax Inspector may impose an additional tax assessment will be extended from 5 to 8 years in situations where this is justified. The legislation is expected to enter into force on 1 January 2028.

Tap water tax
As of 1 January 2027, the tax cap on tap water will be cancelled as a result of measures set out in the 2026 Tax Plan. In the 2027 Tax Plan, the government proposes to increase the rate of tax on tap water by EUR 0.10 per cubic metre of tap water of drinking-water quality supplied, with effect from 1 January 2027. As a result, the rate increases from EUR 0.437 to EUR 0.537 per m³, at 2026 price levels. The rate is indexed annually.

Waste tax – proposed rates
The government proposes to slow down the waste tax increase. The rate increase envisaged in the 2026 Tax Plan – which would have resulted in a rate of EUR 117.10 per tonne in 2035 – is being replaced by a rate rising from EUR 64.00 per tonne in 2028 to EUR 81.00 per tonne from 2030 onwards. Although this reverses part of the proposed increase in the tax burden, it still represents a significant increase compared with the current rate of EUR 40.85 (2026). For the waste sector, this offers some relief compared with the previous plans, while the incentive to make waste streams more sustainable remains in place.

Waste tax – landfill rate with tax abatement
The 2026 Tax Plan already introduced a separate rate for landfill with tax abatement, intended to limit the incentive to landfill waste rather than incinerate it. The 2027 Tax Plan proposes to adjust this rate as well. The assumption remains that landfill with tax abatement is taxed more heavily than incineration. The rate for landfill with tax abatement will therefore remain EUR 10 per 1,000 kilograms higher than the effective rate for incineration. This is in line with the effective incineration rate, which consists of the combined burden of the waste tax and the industrial CO₂ levy. In doing so, the government continues to provide a tax incentive to promote waste processing higher up the waste hierarchy.

Industrial CO₂ levy
The rate of the CO₂ levy for waste incineration plants will be increased from EUR 103.66 to EUR 129.15. In addition, the rates of this levy will rise less rapidly in future: the proposed rate will not be reached in 2030, but rather in 2035.

CO₂ levy on greenhouse horticulture
The ‘Other 2027 Tax Measures’ Bill clarifies that, in the case of partnerships without legal personality such as general partnerships and firms, the tax liability for the CO₂ levy on greenhouse horticulture is on the partnership that operates the greenhouse horticulture business. No allocation is made to the individual partners. The amount of tax due will therefore not change; the government proposes that this clarification be given retroactive force.

Energy tax rates for greenhouse horticulture
The current energy tax framework applies a reduced rate to natural gas supplied to the greenhouse horticulture sector up to and including 1 million m³ of natural gas. This reduced rate is being phased out in stages. Between 2025 and 2034, it will gradually increase to the standard energy tax rate for natural gas.

On 1 January 2027, the green gas blending obligation will become effective. The government intends to compensate the greenhouse horticulture sector for this by reducing the energy tax rates for the sector in 2027 for consumption up to 10 million m³ of natural gas, provided that a green gas blending obligation applies to the supply of the natural gas.

Air passenger tax
The 2026 Tax Plan already provided for a differentiation in air passenger tax, with an effective date of 1 January 2027. The government intends to tax flights of different distances at different rates. The initial idea was to levy EUR 31.04 on short flights (approx. < 2,000 kilometres), EUR 49.87 on medium-haul flights (approx. 2,000 to 5,000 kilometres) and EUR 74.81 on long-haul flights (approx. > 5,500 kilometres). However, the State Secretary is now proposing to reduce the rate for long-haul flights to EUR 59.43. This amendment follows a reduction in rates in our neighbouring countries Germany and Belgium. The Netherlands seeks to achieve harmonisation of air passenger tax with these countries, thus creating a more level playing field with neighbouring nations.

From 1 January 2027, the air passenger tax rate will depend on a passenger’s final destination. In the absence of a contract of carriage – for example, in the case of private flights in a private aircraft – the final destination can be demonstrated by means of the flight plan. This prevents the highest rate from being applied automatically.

Temporary reduction in motor vehicle tax for delivery vans and trucks
The government proposes to temporarily halve the motor vehicle tax on business-owned delivery vans and to temporarily set it at zero for trucks. The measure applies retroactively from 1 July 2026 and remains in force until 31 December 2026. From 1 January 2027, the standard rate structure will apply.

Fuel excise duty reduction
Under the Coalition Agreement, the temporary excise duty reduction for diesel was due to end on 1 January 2027. For petrol, however, the excise duty reduction was to be extended by one year until 31 December 2027. The latter measure is also part of the 2027 Tax Plan. However, the covering letter indicates that a Memorandum of Amendment will be tabled to also maintain the temporary excise duty reduction on diesel during 2027. In addition, the government proposes to phase out the excise duty reduction for petrol and diesel more gradually in 2028.

Indexation of excise duty on alcoholic beverages
The government proposes to introduce an annual indexation system for alcohol excise duty from 1 January 2027. The indexation will be linked to inflation. The indexation applies to beer, wine, intermediate products and other alcoholic products. The minimum amount of the excise duty on beer will not, however, be indexed, as this remains linked to the rate of consumption tax on non-alcoholic beverages.