Every year, the government makes proposals to adjust taxes for entrepreneurs. These measures are set out in the Tax Plan 2025. The cabinet wants many of these measures to take effect on 1 January 2025. However, the Lower and Upper Houses still need to approve the plans. What are the most important measures for entrepreneurs?
Entrepreneurs pay slightly more tax; effect less by measures
People working as self-employed, or SMEs with sole proprietorships or partnerships, will pay slightly more tax on average from 2025 if they make the same amount of profit. The latest tax measures mean entrepreneurs will lose slightly less. This is due to adjustments to income tax rates. The 1st bracket goes down. And the 3 tax brackets get higher bracket limits. An earlier plan to further reduce the SME profit exemption to 12.03% will not go ahead. The exemption does go down from 13.31% to 12.7%. Earlier, it had been decided that the self-employment deduction will be further reduced from €3,750 to €2,470. As a result, entrepreneurs end up paying tax on a larger part of their profit or income. For low incomes, the cabinet wants to increase the rent allowance and the child budget, among other things.
Reduce 2nd tranche box 2 from 33% to 31%
The government wants to reduce the 2nd bracket in box 2 from 33% to 31% by 2025. Entrepreneurs with a private limited company will then pay 31% income tax to the extent their substantial interest income exceeds €67,804. Up to an income in box 2 of €67,804, the rate will remain 24.5%.
Encouraging entrepreneurs to choose best suited entrepreneurial form
With this measure, the government wants to ensure that there is more balance between tax rates for substantial interest holders, entrepreneurs with, for example, sole proprietorships and employees. More balance in tax rates prevents tax-driven behaviour and ensures that entrepreneurs can choose a legal form that best suits the business.
Adjusted business transfer tax rules (BOR and DSR ab)
The government wants to amend the business succession scheme (BOR) and the substantial interest transfer scheme (DSR ab). Someone who inherits or is gifted a business and continues this business can apply the BOR and the DSR ab under certain conditions. These schemes provide lower gift or inheritance tax and income tax deferral. The measures will make the BOR in particular more enforceable. And it will become more difficult to abuse the schemes.
Cabinet proposal for BOR and DSR ab
The government proposes that from 1 January 2025, :
- Changing the continuation period of the BOR from 5 to 3 years. Entrepreneurs are then more likely to have more flexibility in business operations without losing the right to the BOR. For example, to do other activities faster or enter into a joint venture (joint venture).
And the government is proposing that from 1 January 2026:
- apply the BOR and DSR ab only for ordinary shares with a minimum interest of 5%. Options on shares and profit-sharing certificates, for example, will then no longer qualify for the BOR and DSR ab.
- make restructuring easier within the property requirement and the continuation requirement of the BOR. It will then be easier for entrepreneurs to split or merge their business, for example, without losing the right to the BOR.
- extend the BOR's possession requirement for entrepreneurs who started a business later than 2 years after their state pension age. The possession requirement determined how long entrepreneurs had to be owners when they transferred a business. This measure will make it more difficult to avoid gift or inheritance tax by buying a business at an older age.
- not to apply the BOR if the business was ever previously owned by the person inheriting or gifted the business. With this, the government wants to prevent entrepreneurs from applying the business succession carousel and abusing the BOR.
Adjustments 30% scheme for employees from abroad (expat scheme)
The government wants to amend the 30% scheme for employees from abroad (expats), from 1 January 2027. The proposal consists of 2 measures:
- Reimbursement of up to 27% of taxed wages
The government wants expats who meet the conditions to be able to receive tax-free allowances of up to 27% of their taxed wages from 2027. And that in 2025 and 2026, a maximum percentage of 30% will apply. Expats using the scheme for the entire 5 years will have more tax advantage than with the rules in place now. - Higher income standard
The government wants to raise the income standard within the 30% scheme from €46,107 to €50,436 from 2027. And for expats under 30 with a master's degree from €35,048 to €38,388. The government will index these amounts in the coming years. In 2025 and 2026, the current income standard still applies. With this measure, from 2027, fewer expats will be eligible for the scheme and, for some expats who do still qualify, the maximum expat allowance they can receive tax-free will be lower.
The government proposes that the new rules will only apply to expats where the 30% decision was first applied on 1 January 2024 or later. For expats who started before 1 January 2024, the rate of up to 30% will continue to apply for 5 years. Also, for those expats, the current income standard will continue to apply.
With the cabinet's proposal, the adjustment is less drastic than the rules in place since 2024. And, in the cabinet's view, less damaging to the economy. For expats, it will then remain attractive to work in the Netherlands.
Gifts no longer deductible from corporate tax
The government wants donations to charities to no longer be deductible from corporate income tax (vpb). From 1 January 2025, companies may then no longer deduct donations to, for example, a heart foundation or church from their profits. These are donations to an institution for general benefit (ANBI) or a support foundation for social interests (support foundation SBBI).
The 'giving out of company' scheme will be abolished. This affects income tax and dividend tax. Does a company make a gift to an ANBI or support foundation SBBI? And is this at the request of a shareholder with a substantial interest (usually at least 5%)? Then that gift is considered a profit distribution (dividend payment) to that shareholder. That shareholder has to pay income tax (box 2) and dividend tax on that.
Companies can support charities in the form of sponsorship and advertising. Those costs remain deductible as business expenses. The same applies to corporate social responsibility expenses.
The cabinet's proposal does not apply to individuals. They may continue to deduct their donations from income tax.
Discount motor vehicle tax (mrb) emission-free cars until 2029
The government proposes to give emission-free passenger cars a discount on the mrb (road tax) until 2029. The discount of 25% applies to new and used emission-free cars. From 2030, the discount will expire.
The government wants as many petrol- and diesel-powered cars as possible to be replaced by emission-free cars. These are cars that emit less greenhouse gases, nitrogen or particulate matter, such as electric cars and hydrogen-powered cars. However, these cars are heavier due to the battery. The mrb is based partly on the weight of the car. The rebate compensates for the extra weight of an emission-free car. And so it remains attractive to drive an emission-free car.
Bpm for plug-in hybrid passenger cars calculated the same as for other passenger cars
The government proposes to abolish the separate purchase tax (bpm) rate for plug-in hybrid passenger cars (PHEVs) from 1 January 2025. The price per gram of CO2-emissions per kilometre goes down as a result. That will then become the same as for other passenger cars. Whether the bpm for a PHEV then changes or stays the same depends on the model of hybrid a person buys or imports.
Avoiding higher costs when buying plug-in hybrid passenger car
With this measure, the government wants to prevent the bpm for new PHEVs from becoming higher than for other passenger cars due to a new European calculation method. The amount of the bpm depends, among other things, on the CO2-emissions of a car. The European Union will measure emissions from new PHEVs differently from 1 January 2025. A higher CO2-emission value. In 2027, the calculation becomes even stricter and the CO2-emission value again. Thus, the CO2-emission value ended up matching the CO2-emissions in practice. For PHEVs already driving around now and imported into the Netherlands from 2025, the old CO2-value apply.
Making calculation of bpm easier
The measure proposed by the government simplifies the tax system. The calculation of the bpm will then be the same for all new passenger cars, with the same price per gram of CO2 per kilometre.
VAT rate for culture, books and sports from 9% to 21%
For culture, arts, books and sports, the government wants to change the VAT rate from the reduced rate (9%) to the general rate (21%). This applies to:
- Museums: public museums and collections.
- Music and theatre: concerts, music festivals, stage performances, dance performances, musicals and cabaret shows.
- Art: import and supply of art objects, objects for collections and antiques, and performances by performing artists.
- Books: books, e-books, picture books, comic books, colouring books, workbooks and workbooks of at least 32 pages, educational information for education, daily newspapers, weeklies and magazines, and the (digital) supply and lending of books.
- Sport: sports practice at commercial providers, such as a gym or skating rink and access to sports competitions (including at a sports club).
The government proposes to include the measure in the law now, but not to take effect until 1 January 2026. This will allow entrepreneurs and the tax authorities to prepare for this change and adjust ICT systems accordingly. By changing the VAT rate, the government wants to increase tax revenue. It will also simplify the tax system.
VAT rate for overnight stays from 9% to 21%
The government plans to change the VAT rate for overnight stays from the reduced rate (9%) to the general rate (21%) from 1 January 2026. This will apply, for example, to overnight stays in hotels, holiday homes and mobile homes. For camping, the reduced VAT rate will continue to apply.
The government proposes to enshrine the measure into law now, but not to take effect until 1 January 2026. This will allow entrepreneurs and the Tax Administration to prepare for this change. And adjust ICT systems. By abolishing the reduced VAT rate, the cabinet wants to increase tax revenue.
Reduce general transfer tax (ovb) rate for homes to 8% by 2026
The government proposes to reduce the transfer tax rate specifically for residential property from 10.4% to 8% from 1 January 2026. That rate will apply to the purchase of a property that someone will not live in themselves, such as an investment property or holiday home. For people who are going to live in the property themselves for a long time, the starter's exemption and the 2% rate will simply remain.
This measure will make it more attractive to buy houses to rent out. This will allow the tight rental market to grow somewhat. The government also expects the tax cut to encourage more new construction. Investing in new construction will become more attractive as the earnings model for investors will improve due to a lower ovb rate.
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