The Dutch government has outlined Tax Plan 2027 adjustments to individual taxation, including changes to Box 1 thresholds and tax credits, a temporary reduction in the top Box 2 rate, tighter excessive borrowing rules, and an accelerated shift to capital gains taxation in Box 3 from 2028.
The Dutch government published a policy letter from the State Secretary for Finance, Minister of Finance, and Prime Minister to the House of Representatives outlining key adjustments to the Tax Plan 2027 on individual taxation.
Key measures include accelerating the transition to a capital gains tax within box 3 by 2028, alongside a temporary reduction in the box 2 rate to encourage business investments and disincentivise excessive borrowing.
Income tax & purchasing power adjustments (Box 1)
- Higher top rate threshold: The income threshold above which the top tax rate applies is raised to EUR 80,578 (up from EUR 78,426).
- Rebalanced tax credits: Instead of providing additional relief through the employed person’s tax credit, which is set to increase by EUR 133 instead of EUR 173, the government will ease the phase-out of the general tax credit.
Substantial interest tax rate & borrowing limits (Box 2)
- Temporary rate cut: The top bracket tax rate for Box 2 income (income from a substantial interest on amounts above EUR 68,843) is temporarily reduced by 1.8%, from 31% to 29.2%, for four years starting in 2027.
- Incentivising capital release: The temporary reduction is designed to encourage business owners to distribute locked-up capital from their companies at a lower rate, boosting short-term tax receipts for the state budget.
- Tightening excessive borrowing: Starting in 2027, the threshold for excessive borrowing from one’s own company will be gradually reduced to EUR 100,000 in five annual steps of EUR 80,000 (excluding loans taken out for a primary residence).
Box 3 reform: Shift to actual returns
- Legislative amendment: The government will submit a legislative amendment (novelle) to the Wet werkelijk rendement box 3 bill to accelerate the transition to taxation based on actual returns.
- 2028 financial assets: From 2028, a capital gains tax will apply to financial assets, including stocks, bonds, and options, covering around 90% of Box 3 assets with value development.
- 2030 full transition: By 2030, the capital gains tax system will be extended to all remaining Box 3 asset categories.
- 2027 tax-free wealth allowance: The tax-free wealth allowance will be reduced to EUR 30,846 in 2027, returning to its 2020 level.
- 2028 tax-free return allowance: A EUR 1,000 tax-free return allowance will be introduced from 2028. For example, a person holding EUR 50,000 earning 2% interest would have no taxable return.
- Higher deemed return rate: The higher deemed return rate for other assets, including real estate and rental income, will increase by 1.5 percentage points in 2027.
Earlier, the Dutch government presented the 2027 Budget, including the Tax Plan for 2027, on 15 September 2026.
