Netherlands’ State Secretary for Tax Affairs and the Tax Administration, Folkert Idsinga, presented the 2025 Budget including the 2025 Tax Plan to the House of Representatives on Tuesday, 17 September 2024.

The package contains a range of measures to contribute to healthy public finances, improved purchasing power, and a stronger business climate. It also includes several steps aimed at improving the tax system.

Besides various tax measures that contribute to purchasing power, the Tax Plan also sets out several steps to improve the tax system. They include a proposal that eliminates the need for people filing tax returns to make complicated calculations when deducting additional transport costs related to illness or incapacity.

Some of the key measures include:

  • The planned scaling back of the tax deduction for ‘expat’ employees will be partially reversed as of 2027: a 27% deduction will be allowed for five years;
  • The dividend tax share buyback facility for listed companies will also continue to exist, exempting such companies from dividend tax on purchases of their own shares subject to certain conditions;
  • The general limit on interest deduction for corporation tax purposes will be increased from 20% to 25%, bringer it closer into line with the European average;
  • The general qualifying salary under the scheme will be raised from EUR 46,107 to EUR 50,436. The qualifying salary for employees aged under 30 with a Master’s degree will also be raised;
  • As of 2025, the deduction for donations made by businesses will be abolished;
  • Donations will no longer be deductible for the purposes of corporation tax;
  • The rules on the exemption for profits arising from debt waivers for corporation tax where a company has losses over EUR 1 million will be relaxed;
  • The gambling tax rate will rise from 30.5% to 34.2% in 2025, followed by an increase to 37.8% in 2026;
  • Starting in 2026, the reduced VAT rates for accommodation and specific cultural goods and services will be eliminated. As a result, from 1 January 2026, the standard VAT rate of 21% will be implemented;
  • To boost the housing market, the general rate of transfer tax on homes that are not classed as primary residences is being reduced from 10.4% to 8% in 2026.