Online consultation on ‘Tax stimulus for start-ups and scale-ups’

Introduction

On 1 April 2026, the government published the online consultation ‘Tax Stimulus for Start-ups and Scale ups Act’. The government argues that measures are needed because compared to other European countries such as France, the United Kingdom and Sweden, start-ups and scale-ups in the Netherlands are underperforming. And all of this when this category of companies is particularly important for innovation and growth and thus for the future earning capacity of the Dutch economy.

Start-ups and scale-ups often issue share options to attract and retain staff. That said, compared to many other countries, employees in the Netherlands who are granted share options face a high tax burden.

This is why the government proposes to introduce, with effect from 1 January 2027, a wage tax facility for share options granted to employees of start-ups and scale-ups. By means of transitional legislation, it is stipulated that the scheme will also apply to options granted on or after 17 April 2025 and that are still subject to wage tax by the end of 2026. Shares (and share options) qualifying as a lucrative interest are excluded from the scheme, though.

Share options in start-ups and scale-ups

The current statutory provisions governing share options provides for the deferral of wage tax and national insurance contributions until the date on which the options are exercised, or the later date on which the shares through which they have been acquired become tradable. For share options in start-ups and scale-ups, however, the tax is deferred until the actual sale of the shares through which they have been acquired, although employees do have the option to choose one of the earlier dates of taxation as referred to above (provided this is has been stated in a timely manner).

Nevertheless, the most significant proposed measure is a 35% reduction in the taxable base for wage tax purposes. Hence, only 65% of the wage benefit, consisting of the difference between the proceeds on disposal of the shares and the option exercise price, is taken into account. The resulting tax burden is comparable to that in box 2. The relief likewise applies, for that matter, to the benefits derived from the shares (dividends minus costs) during the period in which these are still subject to wage tax.

Definition of start-up and scale-up

The facility is subject to various conditions. Firstly, the Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland, or ‘RVO’) must have issued a decision confirming that the entity is indeed a start-up or scale-up. The validity of this decision is eight years, but may be extended by five years on up to three occasions. As part of this, a new statutory definition is proposed as well. In short, it must involve a withholding agent:

1. that operates a business aimed at rapid growth through a scalable and repeatable, innovation-based revenue model;
2. whose shares or profit-sharing certificates are not traded on a regulated market;
3. whose shares or profit-sharing certificates are not held (directly or indirectly; de jure or de facto) for more than 25% by an entity that does not meet the criterion set out under b.

A ‘scalable and repeatable revenue model’ is a company’s ability to achieve rapid revenue growth by using technology that leads to lower marginal costs and economies of scale. Innovation refers to technical innovation or a significant functional improvement relative to the sector. Once the Actual Return Act comes into force, the new definition will apply mutatis mutandis in box 3, where shares and profit-sharing certificates in start-ups and scale-ups are taxed on the basis of capital gains.

Other conditions

A qualifying share option right is another requirement, subject to which the employer must agree with the employee in writing that the right cannot be exercised earlier than two years after the grant and that the exercise price of the share options at least equals the value of the underlying shares on the date when that right was granted. In addition, the withholding agent’s approval is required for the disposal of the shares, while all relevant details must be recorded and retained in the payroll records. After all, a situation may arise where an employee is no longer employed on the date when the shares are sold. In that situation, too, the former employer must be able to calculate the wage tax and national insurance contributions due and remit them to the Tax Administration.  

No longer qualifying

If a withholding agent no longer qualifies as a start-up or scale-up, or in the event of bankruptcy, this must be reported to the RVO within four weeks. The previously issued decision will then be revoked. Failure to comply with this obligation is punishable by a fifth-category fine (2026: up to EUR 110,000).

The RVO, for that matter, may also revoke the decision on its own initiative if it appears likely that the entity is no longer a start-up or scale-up, or if the information provided in the application was incorrect or incomplete to the extent that a different decision would have been taken had the correct facts and circumstances been known.

If the conditions for applying the facility are no longer met, settlement need not always take place immediately. If this occurs, the general rule will be relied on, which is that taxation takes place on the date when the options are exercised, or at the later date when the shares become tradable (Article 10a Wages and Salaries Tax Act 1964). For the period during which a qualifying option right existed, the reduction of the tax base may be applied on a pro rata basis.

Special cases

If the option right itself is sold, tax must be paid immediately on the difference between the proceeds of the sale and the exercise price. In that case, no reduction of the tax base is granted. In the event of an employee’s emigration, tax is levied at market value although in that case a protective assessment is imposed and the Tax Collector grants a deferral of payment.

Finally, provision is also made for a facility in the event of disposal as part of a share merger, demerger or acquisition of more than 50% of the shares in a start-up or scale-up. In that case, the facility may be continued subject to certain conditions. The consultation phase ends on 29 April 2026.