Dutch Government Plans Major Tax Relief for Startup Employee Share Options
The Dutch government has announced plans to improve the tax treatment of employee share options for startups and scale-ups. The proposal includes a significant tax cut and more flexibility for employees to defer tax until they actually cash out.
What’s Being Proposed?
In the 2025 Spring Budget, the Dutch Ministry of Finance revealed its intention to revise the employee share option regime for qualifying startups and scale-ups. The goal: make the Netherlands more attractive for entrepreneurial talent and align better with international practices.
Key elements of the proposal include:
- Reduced tax base by 35%, leading to a lower effective tax rate of approximately 32.2%, down from the current 49.5%
- Deferral of taxation to the actual moment of cash realisation — typically when the shares are sold, rather than at the moment of exercise
- Planned effective date: 1 January 2027
These changes are expected to apply only to qualifying startups and scale-ups, subject to further conditions in the upcoming draft law.
Why Does This Matter for Expats?
If you work for a Dutch startup or scale-up and have been granted share options, this reform could benefit you directly. Here’s how:
- Lower taxes on your gain: By reducing the taxable amount and the timing of taxation, you keep more of your hard-earned upside.
- Better alignment with liquidity: You’ll be taxed only when you can actually sell your shares, avoiding the common problem of paying tax on paper gains.
- Greater flexibility in exit planning: Especially relevant in international or M&A contexts, where timing and valuation can vary.
This is especially welcome for expats who may not be familiar with the quirks of the Dutch system, where current rules can result in unexpected tax bills at inopportune moments.
What’s Next?
The government has announced its intent, but the detailed legislative proposal is still in the works. We expect more information later this year, with the changes set to take effect on 1 January 2027.
If implemented as planned, this would mark a major improvement in how employee share options are taxed in the Netherlands — and could help attract and retain global talent in the Dutch tech ecosystem.
Need Advice?
Do you work for a startup or scale-up in the Netherlands and want to understand how this change might affect your equity package? Or are you considering an offer with share options?
Our tax advisors specialize in helping expats and international professionals navigate Dutch tax rules with confidence.
Get in touch today via our website for tailored advice on share plans, tax timing, and equity structuring.