Key changes in the Dutch Tax Plan 2025 (Belastingplan 2025)

September 26, 2024

The Dutch government has presented the 2025 Tax Plan to the House of Representatives (Tweede Kamer), which includes several significant adjustments to tax rates and amounts as per January 1^st 2025. Below are the key changes in the proposed draft-act:

• Personal income Tax:
  • The first tax bracket will be lowered from 9.32% to 8.17% (excluding social security premiums).
  • The second tax bracket will be increased from 36.97% to 37.48%. The third bracket remains the same at 49.5%.
  • The tax rate for income from substantial shareholdings (≥ 5%) will decrease from 33% to 31%. The tax rate for income from substantial shareholdings up to € 67.804 per annum remains at 24.5%.
  • The general tax deduction (algemene heffingskorting) is reduced from € 3,362 to € 3,027.
  • The profit exemption for sole proprietorships (mkb-winstvrijstelling) will be reduced from 13.31% to 12.7%.
  • The independent workers deduction (zelfstandigenaftrek) will be reduced from € 3,750 to € 2,470 and will continue to decline over the next years to € 900.
  • The proposed change of the expatruling (30% regeling) will be reversed. The untaxed allowance of 30% will remain in place up to 2026, whilst the salary norm will be increased from € 46.107 to € 50.436. From 2027 onwards, the untaxed allowance will decrease from 30% to 27%.
• Corporate income tax and dividend tax
  • Limitation of interest deduction for the earnings stripping rule will be more lenient as interest deduction up to 25% of the profit will be allowed, instead of the current 20%.
  • Gifts and donations to charity are no longer deductible.
  • The purchase of own shares can remain exempt from dividend tax for qualifying companies.
  • In case deductible losses exceed € 1 million, the exemption for waived receivables (kwijtscheldingswinstvrijstelling) is expanded when the waived receivable is lower than the losses of that year.
  • All limited partnerships (commanditaire vennootschappen) will be considered fiscally transparent, including open limited partnerships (open cv).
• VAT:
  • The VAT rate on cultural activities, books, hotel rates and sports will increase from 9% to 21% as per January 1^st  2026.
• Transfer tax
  • The transfer tax rate on private residences will be reduced from 10.4% to 8% as per January 1^st  2026. Note that this rate would apply to second homes. For primary homes, the rate will remain 2%.

• Gambling tax
  • The rate will increase from 30.5% in 2024 to 34.2% in 2025 and 37.8% in 2026.

• Transportation:
  • The reduced excise duty on fuel is prolonged until the end of 2025 and the excise duty will not be corrected for inflation.
  • Electric vehicles will receive a discount on the vehicle tax (mrb) of 25% as per January 1^st 2025, to compensate for the extra weight of the battery banks. The lump sum tax on the purchase of a new vehicle (bpm) for plug-in hybrids will be calculated the same way as for regular vehicles.
• Energy:
  • For solar panels, the netting arrangement (salderingsregeling) will be abolished as per 2027, meaning that supplied power to the grid can no longer be offset with consumed power on a 1=1 basis.
  • The energy tax on gas will be slightly reduced.
• Other
  • Box 3 tax is calculated based on a fictional return on investments (ROI). The Supreme Court ruled in June 2024 that this fictional ROI for assets other than bank deposits is not allowed. Qualifying taxable persons that received assessments after December 24^th 2024 can fill out a form “actual ROI” around mid-2025. Assessments prior to that date could be reduced by a written request for ex-officio reduction. The deadline for a request for a (revised) personal income tax assessment over the year 2019 expires on December 31^st 2024 (five years).

For more information about the key changes in the Dutch Tax Plan 2025, please contact Maarten Tervoort or Giordy Janga.