State Secretary Idsinga (Taxation and Tax Authorities) presented the 2025 Tax Plan package to the House of Representatives on Tuesday.
Support purchasing power and security of existence
The government is improving purchasing power for middle incomes and various vulnerable groups with the following measures. The first income tax bracket that applies to an income of up to €38,441 per year will be reduced to 35.82%. In addition, a second bracket of 37.48% will be introduced that applies to an income between €38,441 and €76,817 per year. As a result, workers and AOW recipients will have more net income in 2025.
In addition, people also benefit from the reduction of the energy tax on natural gas. As a result, everyone will pay €29 less tax in 2025. The current excise duty reduction on petrol, diesel and LPG will also be extended by 1 year and no inflation correction will be applied to this excise duty. The excise duty will remain €0.79 for petrol, €0.52 for diesel and €19 for LPG, just like in 2024.
The government is also taking more measures to support people with lower incomes, such as increasing rent allowance and the child-related budget.
Tax system improvements
The improvement of the tax system is ongoing, also with this Tax Plan. The government is taking a number of measures because evaluations show that certain regulations no longer do what they are intended for or are not an efficient way to achieve the goal. From 2025, complicated calculations will no longer be necessary when deducting additional transport costs due to illness or disability in the tax return. A fixed amount of €0.23 per kilometre is deductible for visiting a doctor, hospital or pharmacy. People who have additional transport costs due to a serious illness or disability may also deduct a fixed amount of €925. Keeping receipts for, for example, fuel, insurance or adjustments to the car is no longer necessary. Travel costs made by taxi or public transport remain deductible at actual costs incurred.
Business succession
There will be amended rules for the tax on business transfers (business succession scheme (BOR) and the substantial interest transfer scheme (DSR ab), which will simplify these schemes. From 1 January 2025, the ownership and continuation requirement will be reduced from 5 to 3 years. Entrepreneurs will then have more flexibility in their business operations sooner without losing the right to the BOR. From 1 January 2026, access to the BOR and DSR will be limited to ordinary shares with a minimum interest of 5%. In addition, unintended use of the BOR through rollator investments and double BOR will be prevented.
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Furthermore, the reduced VAT rates for the provision of accommodation and for certain cultural goods and services will be abolished as of 2026. As a result, the general rate of 21% will apply from 1 January 2026. Sports clubs are exempt from this measure and there will be compensation for teaching materials for pupils up to the age of 18.
Tax deduction
The gift deduction for entrepreneurs will be abolished as of 2025. This applies to both gift deductions in corporate income tax (CIT) and the ‘donation from the company’ scheme. As a result, a gift will be considered a profit distribution on which tax must be paid as of 2025. Sponsoring and advertising are business costs that remain deductible.
Undesirable tax structures
Undesirable tax structures are also being tackled. Such as a structure for real estate where no VAT is paid, while this is the intention.
Transfer tax
To boost the housing market, the general transfer tax rate for homes that are not primary residences will be reduced from 10.4% to 8% as of 2026.
Entrepreneurial climate
Having a good competitive position and predictable tax policy are important priorities, the government reports. That is why a stable and predictable tax policy is being pursued. The austerity measures in the expat scheme will be partially reversed from 2027: a deduction percentage of 27% will apply for 5 years. The salary standard will be increased from €46,107 to €50,436. The salary standard will also be increased for employees under the age of 30 with a master’s degree. Furthermore, the purchase facility for listed companies in dividend tax will continue to exist. As a result, the purchase of own shares by listed companies will remain exempt from dividend tax under certain conditions. Furthermore, the government will ensure that the generic interest deduction limitation in corporate income tax will be expanded, from 20% to 25%. This is more in line with the European average. The government will also relax the exemption for waiver of profit in corporate income tax for losses above €1 million. This will ensure that fundamentally healthy companies can more easily reach an agreement with creditors.
Government finances
The government is taking a number of measures from the Main Lines Agreement and additional measures to absorb financial setbacks. For example, the gambling tax will be increased gradually to 34.2% in 2025 and 37.8% in 2026. This is the tax that people pay if they have won more than €449 in a Dutch lottery or casino. The government is scrapping the reduction in the box 3 rate, leaving it at 36%. The netting scheme for small consumers of solar panels will be abolished as of 2027. Owners of solar panels will therefore no longer be able to offset the electricity they supply back to the grid with the electricity they consume. Employers will pay a higher aWf premium and Aof premium for their employees.
Box 3
In addition to measures in the Tax Plan, this cabinet has also taken a decision on who is eligible for additional legal redress for box 3 following the Supreme Court ruling of 6 June this year. The cabinet has opted for a broad target group. This means that all taxpayers with an assessment that has been or will be imposed after the Christmas ruling of 24 December 2021 can complete the actual return statement form if their actual return was lower than the assumed flat-rate return. Taxpayers with assessments from the years 2019 and 2020 must submit a request for ex officio reduction before the expiry of the five-year term. Taxpayers with assessments from the year 2019 have until the end of this year to do so, while taxpayers with assessments from the year 2020 have until the end of 2025. Taxpayers with assessments from 2017 and 2018 must have already submitted a request for an ex officio reduction in order to use the form.
The Supreme Court has indicated that in order to determine the actual return, the entire assets of the taxpayer in box 3 must be included, both the direct and indirect return and without deduction of the tax-free assets. The government follows this definition of actual return.
The 2025 Tax Plan and all associated documents are here to be found.
