Budget Day 2025: key government measures and proposed changes 

Each year, the Dutch government presents its budget plans on a day known as Budget Day or Prinsjesdag. This is when new proposals for taxes, social contributions, and other financial measures are announced, giving insight into how the government intends to shape economic and fiscal policy. The 2025 measures will affect individuals, business owners, directors, and employers. We are happy to keep you informed, and if you have any questions, you can always consult a Crowe advisor. 

1. Employers subject to final levy for non-electric cars 

If an employer provides cars that are not fully electric or not hydrogen-powered, a final levy on payroll taxes will apply from 2027. This levy amounts to 12% of the car’s list price, including VAT and BPM (Dutch registration tax). The measure applies to new cars with a first registration date from January 1, 2027. 

Important: The pseudo-final levy is borne by the employer. It is an additional charge that may not be passed on to employees. The regular addition for private use of a company car remains unchanged. 

Commuting and private use 
The levy only applies to cars that employees also use for commuting and private purposes. Unlike the benefit in kind for private use, the calculation of the pseudo-final levy does not take the employee’s personal contribution into account. 

Also applies to directors, not self-employed persons 
The pseudo-final levy is a charge borne by employers. This means that a private limited company (BV) providing a company car to a director-major shareholder (DGA) may be subject to the levy.  

Fossil fuel passenger cars 
The measure applies to fossil fuel cars made available for private use from January 1, 2027. Transition rules apply: for fossil cars already provided to employees before 2027, employers do not pay additional tax until September 16, 2030. Only from July 2030 will the pseudo-final levy apply to all fossil fuel cars provided before January 1, 2027. 

The measure is intended to stimulate and accelerate the transition to electric vehicles to achieve climate targets more quickly. 

2. Repeal of inheritance tax savings and simplification of the 180-day rule 

The 2026 Budget introduces a measure to ensure that any unequal division of marital property or settlement clause triggers gift or inheritance tax. Previously, it was possible to avoid tax by granting one spouse more than half of the community property or settlement sum. 

Background 
This follows a Supreme Court ruling allowing a 90%-10% division, effectively avoiding inheritance tax through amended marital agreements. The outgoing government views this as undesirable. Although the measure mainly targets divisions near death, the law will now apply to all unequal divisions, even if not made near the end of life. 

Important: The new calculation applies to unequal divisions agreed on or after September 16, 2025 (the date of Budget Day announcement). Unequal divisions made before this date are unaffected. 

Simplifying the 180-day rule 
Currently, gifts made within 180 days of the person’s death are included in the inheritance. This requires separate gift tax and inheritance tax filings, with subsequent tax reconciliation. The new proposal treats gifts made within 180 days of death as part of the inheritance only, eliminating the need for a separate gift tax declaration. This applies to deaths from January 1, 2026. 

3. VAT rates 

The reduced VAT rate for culture, media, and sports will be maintained. Criticism of applying the standard rate has been addressed, with funding found by partially limiting the inflation adjustment for income and payroll taxes. The 2025 Budget will be retroactively adjusted on this point. 

For 2026, measures already approved in the 2025 Budget include: the VAT increase on accommodation (excluding camping with own equipment) to 21%, directly affecting hospitality and recreation businesses. Preparation in 2025 is recommended.  

4. VAT adjustment for real estate: investment services of at least €30,000 

Scope 
This applies to upgrading, expanding, repairing, replacing, or maintaining real estate, including demolition work related to renovations. 

Threshold and adjustment 
For investment services of at least €30,000, a VAT adjustment regime applies from 2026. These services are monitored in the year of commissioning and the following four years. If use changes between VAT-taxable and exempt activities, the VAT deduction on the investment service is revised. 

Timing 
The 2025 Budget approved this law. It is highlighted again because timing is important: 

• From January 1, 2026: the VAT adjustment applies to investment services commissioned from this date. 

• Before January 1, 2026: investment services are not affected. Early commissioning may avoid partial VAT repayment, but changes from exempt to taxable use could increase deductible VAT, making it advantageous to defer commissioning until 2026. 

5. Stamp duty: additional 8% rate category 

*Applies to starters under 35 purchasing a home up to €555,000. 

The 8% rate for non-primary residences aims to encourage investment in rental properties. 

6. Participation schemes and “lucrative interest” 

In private equity and management participation schemes, managers may receive shares or other assets as part of their compensation. Leveraging these can yield high returns disproportionate to invested capital or risk. These shares fall under the “lucrative interest” regime. 

Current rule 
Income is treated as employment income (Box 1). Using the substantial interest variant, managers hold shares via a BV, passing at least 95% of benefits to themselves to be taxed in Box 2, where the rate is lower than Box 3. 

Proposed change 
The government proposes to align the Box 2 tax rate for private equity managers with Box 3 at 36%, increasing the effective tax. 

Tip: Participation schemes are increasingly used to retain and reward employees, with various ways to involve them in company success. 

7. Box 3: higher taxation 

From 2028, in Box 3 the actual returns will be taxed. Until then, the current deemed return system remains, with adjustments for 2026: 

Exemption threshold 

• Without fiscal partner: €51,396 (was €57,684) 

• With fiscal partner: €102,792 (was €115,368) 

Deemed returns 
Assets are categorized into: 

• Bank deposits 

• Other assets (investments, real estate) 

• Liabilities 

The deemed return for “other assets” increases from 5.88% to 7.88%. 

Rate 
Tax on Box 3 income remains 36%. 

Evidence rule 
Until 2028, taxpayers can demonstrate that actual returns were lower to reduce tax.