Budget Day 2026 plans: the 10 most
important points for SMEs

This Budget Day we are faced with a caretaker government with only limited support in Parliament. As a result, the 2026 Tax Plan does not include any major new initiatives, solutions, or expenditures. In his annual address to Parliament, King Willem-Alexander stressed the concern that both SMEs and large corporations are increasingly negative about the Dutch investment climate. This is a signal that must be taken seriously. Reducing the regulatory burden for businesses is urgently needed. We see this partly reflected in the government’s plans: by mid-2026, a total of 500 rules will be simplified or scrapped, including the reporting obligation on work-related mobility (WPM).

At the same time, however, employers face a heavier tax burden, for example through the introduction of a levy on fossil-fuel company cars. Below we outline the ten most important tax proposals and changes for you as an entrepreneur.

1. Employers will pay a 12% levy on fossil-fuel company cars
2. Adjustments in Box 3: higher returns, lower tax-free allowance
3. Various changes in tax rates
4. The reporting obligation on mobility will be relaxed
5. Clarification of the bicycle scheme
6. Transfer tax: introduction of 8% rate in 2026
7. VAT on culture, media, and sports remains 9%
8. Early retirement scheme structural as of 2026
9. Tax benefit for green investments reduced
10. Clarification of inheritance and gift tax

1. Employers will pay a 12% levy on fossil-fuel company cars

As of January 1, 2027, you as an employer will be subject to a special final levy of 12% if you provide an employee with a passenger car that emits CO₂ and is also made available for private use. Commuting is explicitly considered private use.

The purpose of this measure is to accelerate the transition to fully electric cars, in line with the climate goals for 2030. Fully electric vehicles and vehicles that are used exclusively for business purposes are exempt from this rule.

The levy is calculated on the value of the car.

For your business, this means that as of January 1, 2027, you must calculate this special final levy on a monthly basis. However, you may also postpone payment until the second payroll tax return period in 2028. The levy may not be passed on to the employee, and an employee’s personal contribution does not affect the amount of the levy.

Please note: until September 17, 2030, no levy is due on cars that were made available to employees before January 1, 2027. After this date, the levy will apply to all fossil-fuel passenger cars used for private purposes.

2. Adjustments in Box 3: higher returns, lower tax-free allowance

The government is introducing several changes to the current Box 3 system as a step toward the new regime based on actual returns. The intended implementation date of the new system is January 1, 2028. Below are the main points that will take effect on January 1, 2026.

The notional return for other assets will increase from 6% to 7.78%. At the same time, the tax-free allowance will be reduced from €57,684 to €51,396 per person, meaning that more taxpayers will become liable for Box 3 tax. The rules for proving actual returns will be tightened. This aims to prevent tax avoidance through bonds with accrued interest. Purchases made after August 25, 2025, will be subject to stricter conditions.

The reduced valuation ratio for rented properties (leegwaarderatio) will be restricted: rental to related parties at a non-market rent will no longer fall under this scheme. This measure is intended to prevent tax advantages from artificially low rents. Related parties are those so closely connected that they can agree on a rent that would not normally occur in the market.

3. Various changes in tax rates

For taxpayers younger than the state pension age, the rate in the first income tax bracket will decrease slightly from 35.82% (2025) to 35.70% (2026). The second bracket will increase slightly from 37.48% (2025) to 37.56% (2026). The third bracket will remain unchanged at 49.50%. For taxpayers older than the state pension age, the rate in the first bracket will fall from 17.92% (2025) to 17.80% (2026). The second bracket will increase minimally from 37.48% (2025) to 37.56% (2026), while the third bracket will remain unchanged.

In addition, the bracket thresholds in Box 1 of income tax will change with limited indexation. From an income of €79,137 onwards, the highest rate of 49.50% will apply.

To make employment more attractive, the maximum employment tax credit will be increased from €5,599 (2025) to €5,712 (2026). The maximum general tax credit will rise slightly from €3,068 to €3,115, and the income-related combination tax credit from €2,986 to €3,032. The tax credits for older taxpayers and single older taxpayers will also increase slightly.

At the same time, the self-employed deduction will be reduced from €2,470 to €1,200, in line with the policy of phasing out fiscal advantages for the self-employed. For businesses, this means that the tax incentive for self-employment will continue to decrease. Employment will become more fiscally attractive. The SME profit exemption will remain unchanged at 12.70%, which provides some stability.

4. The reporting obligation on mobility will be relaxed

The reporting obligation on work-related employee mobility (WPM) will now only apply to companies with 250 employees or more. Previously, this obligation applied to companies with 100 employees or more.

The government aims to reduce the regulatory burden for entrepreneurs. This change is part of a broader approach in which a total of 500 rules will be simplified or abolished by mid-2026.

5. Clarification of the bicycle scheme

Since January 1, 2020, a 7% addition (minus any employee contribution) applies to company bicycles that are also used for private purposes. This addition is mandatory once the bicycle is used for commuting.

The government proposes to adjust this scheme retroactively to January 1, 2020. If the bicycle is not stored at the employee’s home or place of residence, or only up to 10% of the time, the addition is zero. This means no wage or income tax is due. The aim of this adjustment is to prevent unintended taxation, for example in the case of pool bicycles or campus bicycles. This scheme also applies to entrepreneurs subject to income tax.

Please note: if the bicycle is stored at the employee’s home or place of residence more than 10% of the time, the regular 7% addition applies.

6. Transfer tax: introduction of 8% rate in 2026

In 2026, four rates will apply for transfer tax. This change was already announced in 2025.

The standard rate of 2% applies to homes that the buyer will use as their main residence. First-time buyers under the age of 35 may, under certain conditions, apply a 0% exemption when purchasing a home with a market value of up to €555,000 (2026). For homes that are not used as the main residence, a new rate of 8% will apply. This includes investment properties, holiday homes, homes for children, or rental properties.

The rate for non-residential properties remains 10.4%, applying to, for example, commercial real estate, business premises, and undeveloped land.

The introduction of the 8% rate for non-main-residence homes is intended to make investments in rental housing more attractive.

7. VAT on culture, media, and sports remains 9%

The government has decided to maintain the reduced VAT rate of 9% on culture, media, and sports. The previously planned increase to 21%, scheduled for January 1, 2026, has been cancelled.

Maintaining the lower rate costs €1.3 billion annually. The government covers this by limiting the inflation adjustment on income and payroll taxes.

For businesses in culture, media, and sports, the VAT rate will remain 9%. For accommodation providers, such as hotels and B&Bs, the standard VAT rate of 21% will apply from January 1, 2026.

8. Early retirement scheme structural as of 2026

The temporary RVU exemption will be continued permanently from 2026. Employees may stop working up to three years before the state pension age and receive a payment. If this payment remains within the exemption threshold, the employer will not owe the 52% pseudo-final levy.

The exemption threshold will increase by €300 gross per month and will be indexed annually in line with the minimum wage. In 2025, the RVU exemption threshold is €2,273 per month. Above this amount, a pseudo-final levy applies: 57.7% in 2026, 64% in 2027, and 65% in 2028.

9. Tax benefit for green investments reduced

Green investments currently provide a tax benefit through an exemption in Box 3. In addition, a tax credit of 0.1% applies to the exempted amount. The scheme applies to investments in recognized green funds that finance sustainable and innovative projects.

From January 1, 2025, this benefit will be gradually phased out. In 2025, the exemption will still be €26,312 (€52,624 for tax partners). By 2027, it will be reduced to only €200 (€400 for partners). The scheme is therefore effectively abolished.

The tax credit will still formally exist in 2027, but its effect will be minimal. Due to implementation issues at the Tax Administration, the definitive abolition has been postponed to January 1, 2028.

10. Clarification of inheritance and gift tax

Four measures were presented on Budget Day 2025 regarding inheritance and gift tax. The government aims to clarify tax practice and prevent unfair situations.

Gifts made within 180 days before death will henceforth be taxed only through inheritance tax. The purpose of this measure is to simplify tax returns.

Biological children without legal recognition will be treated the same as legal children for inheritance and gift tax purposes. This allows them to benefit from the child rate and child exemption. The condition is that biological parentage must be proven through a DNA test.

For prenuptial agreements with unequal division (for example, 90/10), any portion above 50% will be subject to inheritance or gift tax. Prenuptial agreements drafted before September 16, 2025, are exempt from this rule, unless later amended. This measure is intended to prevent tax avoidance through uneven distributions and applies to married couples, registered partners, and cohabitants.

The filing period for inheritance tax will be extended from 8 to 20 months after death. Tax interest will only accrue from the 21st month. This provides more time for a correct and complete tax return and reduces the risk of deferral requests and objections.