On 17 September 2024, the Dutch Budget for 2025 was presented, including the Tax Plan for 2025. Some of the main measures include:

• The reversal of the previously approved repeal of the tax-free share buyback facility for listed companies from 2025, exempting companies from dividend tax on purchases of their own shares subject to certain conditions;
• An increase in the 20% of EBITDA interest deduction limitation to 25% from 2025;
• The repeal of the deduction for donations made by businesses for corporate tax purposes from 2025, along with the repeal of the rules under which donations made by a company were not regarded as profit distributions, meaning that such donations will be regarded as taxable profit distributions from 2025 for donations made at the request of shareholders with a substantial interest (sponsorship and advertising expenses will remain deductible);
• The cancelation of the planned reduction in the SME profit exemption (reduction) rate to 12.03% in 2025, with the currently scheduled reduction to 12.7% in 2025 maintained;
• The removal of the reduced VAT rate for cultural goods and services from 2026 including museums, music and drama, art, books, and sports, with the applicable rate increased from 9% to 21%;
• The removal of the reduced VAT rate for overnight accommodation from 2026, with the applicable rate increased from 9% to 21%, except for campgrounds;
• An increase in the gambling tax rate from 30.5% to 34.2% in 2025 and to 37.8% in 2026;
• The partial reversal of the planned scaling back of the 30% ruling (exemption) regime for expats, with a 27% allowance (deduction) provided from 2027 (maximum of 30% in 2025 and 2026), along with an increase in the general qualifying salary under the regime from EUR 46,107 to EUR 50,436 in 2027, and from EUR 35,048 to EUR 38,388 for expats under the age of 30 with a master’s degree (current qualifying salary maintained for 2025 and 2026);
• A reduction in the basic rate of individual income tax for Box 1 income (employment and certain other income) to 35.82% on income up to EUR 38,441, along with a second bracket rate of 37.48% on income of between EUR 38,441 and EUR 76,817 per year from 2025;
• A reduction in the top bracket rate for Box 2 income (income from a substantial interest) from 33% to 31% in 2025 on income above EUR 67,804; and
• The removal of the planned reduction in the tax rate on individual Box 3 income (taxable income from savings and invested assets), which will remain at 36%.

The Dutch Directorate-General for Tax and Customs Administration has issued the Decree of 19 September 2024, which was published in the Official Gazette on 20 September 2024 and replaces the Decree of 9 March 2020 on the participation exemption. Subject to various conditions as detailed in the Decree, the participation exemption generally provides that benefits arising from a participation, and the costs incurred in connection with the acquisition or disposal of that participation, should not be taken into account in determining profits. The Decree provides detailed information and examples on when and how the participation exemption may be applied considering the relevant provisions contained in Article 13 of the Corporate Income Tax Act, including participation requirements for the exemption and the associated benefits and costs eligible for the exemption. The Decree is effective from 21 September 2024.