Dutch tax changes 2027: Key updates from Prinsjesdag for individuals, businesses & expats.

Every year on Budget Day (Prinsjesdag), the Dutch government announces tax changes for the year ahead. 2027 brings a mix of adjusted tax rates, new measures, and previously announced changes that now take effect. Some will affect your bottom line directly. Others are smaller shifts in brackets or allowances. Below, we’ve highlighted the changes we believe matter most. Whether you’re running a company, working as an entrepreneur, building your career in the Netherlands as an expat, or managing employees.

Keep in mind that many of the measures discussed below are still proposals and may change during the parliamentary process. The tax figures published immediately after Budget Day 2026 are therefore still indicative.

Key Takeaways:   – Income tax rates increase in brackets 1 and 2; the top rate and brackets remain stable – The self-employment deduction (zelfstandigenaftrek) shrinks from €1.200 to €900 – The starter’s deduction nearly disappears (€2.123 to only €10) before being abolished entirely in 2028 – For expats: the 30% ruling reduces from 30% to 27%, and the partial non-resident taxpayer status ends The green investment exemption in Box 3 drops dramatically (€26.715 to €200 per person) – Employers face higher payroll contributions and a new 12% levy on fossil-fuel company cars – Transfer tax for investment and second homes decreases from 8% to 7% – The travel allowance for employees and entrepreneurs increases to €0.25 per kilometre (retroactive to January 2026)

Income tax changes 2027: new Rates, brackets & allowances

Adjustment of Income Tax Brackets and Rates – Box 1

The three-bracket income tax system remains in place in 2027, but rates in the first two brackets will increase slightly.

Taxable income	2026	2027
Up to first threshold	35.75% up to €38.883	36.23% up to €39.247
Second bracket	37.56% up to €78.426	38.16% up to €78.426
Top bracket	49.50%	49.50%

The threshold for the highest 49.5% tax rate remains stable at €78.426, while the first threshold is indexed slightly. This means that despite normal annual indexation, taxpayers in the first and second brackets will generally face a slightly higher income tax rate in 2027.

Tax Credits 2027: What’s Changing?

• The maximum general tax credit (algemene heffingskorting) increases slightly from €3.115 to €3.154.
• The maximum employment tax credit (arbeidskorting) rises from €5.685 to €5.929.
• For taxpayers above state pension age, the maximum elderly tax credit (ouderenkorting) decreases from €2.067 to €1.993.

As always, the actual tax credit you receive depends on your income and personal circumstances.

Maximum deduction rate in Box 1

The maximum rate at which various Box 1 deductions can effectively be claimed increases to 38.16% in 2027, compared with 37.56% in 2026. This limitation applies to mortgage interest deductions, entrepreneurial deductions, the SME profit exemption, the exemption for making assets available, and personal deductions.

Tax Changes for Entrepreneurs & Self-Employed in 2027

Self-Employment deduction (Zelfstandigenaftrek) further reduced

The gradual reduction of the zelfstandigenaftrek continues. The deduction decreases from €1.200 in 2026 to €900 in 2027. The SME profit exemption (MKB-winstvrijstelling), on the other hand, remains unchanged at 12.7%.

Starter’s deduction (startersaftrek) almost gone

This is a substantial change. The additional starter’s deduction decreases from €2.123 in 2026 to only €10 in 2027, before being abolished completely from 2028. There is no transitional arrangement. For new entrepreneurs, this means the tax advantage traditionally available in the first years of running a business will become considerably smaller. If you’re launching a business, it’s worth discussing timing and structure with a tax adviser.

New legal presumption for lower-paid freelancers

An important shift for the freelancer market is the introduction of a legal presumption of employment. Self-employed workers earning below a certain hourly rate, indicatively around €38 per hour in 2026, will be able to invoke a presumption that they are actually working under an employment contract. If they invoke this presumption, it will be for the client to demonstrate that no employment relationship exists. The legislation is scheduled to enter into force on 31 December 2026, making this particularly relevant for freelancer arrangements from 2027 onwards.

Importantly, this does not mean that every freelancer charging less than €38 per hour will automatically become an employee. It changes the burden of proof where the freelancer invokes the legal presumption.

Travel allowance increased to €0.25/km (retroactive to January 2026)

The deductible kilometre allowance for entrepreneurs and individuals receiving income from other activities increases from €0.23 to €0.25 per kilometre. Interestingly, this increase applies retroactively from 1 January 2026. The same €0.25 maximum tax-free allowance also applies to employees and may be used for travel by car, public transport, bicycle, motorcycle or even on foot.

Box 2 & Box 3 tax changes 2027: substantial shareholdings & investments

Box 2 – substantial shareholdings

For individuals owning 5% or more of a company, the Box 2 rates themselves remain unchanged.

Box 2 taxable income	2026	2027
First bracket	24.5% up to €68.843	24.5% up to €69.703
Second bracket	31%	31%

The main adjustment is therefore the indexation of the threshold between the two brackets.

Box 3 – Savings and Investments

Box 3 Rate Remains at 36%
The Box 3 tax rate remains unchanged at 36% in 2027. The tax-free allowance (heffingsvrij vermogen) is increased slightly:
– 2026: €59.357 per taxpayer
– 2027: €60.098 per taxpayer
For tax partners, the combined tax-free amount is therefore twice this amount. As in previous years, the final deemed return percentages for the different asset categories are not yet available at Budget Day and will be determined later.

Green investment exemption almost completely abolished

This is a significant change for green investors. The Box 3 exemption for qualifying green investments decreases dramatically from €26.715 per taxpayer in 2026 to €200 in 2027; and from €53.430 for tax partners to only €400. The exemption and related tax credit are then scheduled to disappear completely from 1 January 2028. For taxpayers holding substantial amounts in qualifying green funds, this can materially increase the amount of wealth exposed to Box 3 taxation.

New Box 3 system delayed again

The introduction of the new Box 3 system based on actual returns remains uncertain. The government did not submit the expected additional legislation on Budget Day and has postponed decisions on possible adjustments to the Spring Memorandum 2027. As a result, the planned introduction of the new system in 2028 is under increasing pressure. The Budget Day documents indicate that a complete capital gains tax system could potentially be introduced from 2030, but this would require an ambitious legislative timetable. For the time being, taxpayers continue to deal with the current Box 3 system alongside the possibility of using actual returns where the applicable rules allow this.

Expat tax changes 2027: 30% ruling & non-resident status

30% ruling becomes 27%

One of the most important changes for internationally recruited employees is the reduction of the Dutch expat scheme. From 2027, the maximum tax-free allowance decreases from 30% to 27%. There is transitional protection for employees who were already using the 30% ruling before 2024. Employees outside this transitional group will also be subject to a higher salary requirement. In practice, the impact depends heavily on when the employee’s 30% ruling started.

Final end of partial non-resident taxpayer status

Partial non-resident taxpayer status was abolished from 2025, but employees who were already using the 30% ruling before 2024 were allowed to continue using the transitional regime through 2026. This means that 2026 is the final year of the transitional regime. From 2027, affected expats will become fully subject to the normal Dutch Box 2 and Box 3 rules in respect of their worldwide assets and substantial shareholdings. For expats holding foreign investment portfolios, savings, real estate or significant foreign company interests, this can have a considerably larger tax impact than the reduction of the 30% allowance itself.

Employer & payroll tax changes 2027

Tax-free travel allowance increased

As mentioned earlier, employers can now reimburse employees up to €0.25 per kilometre tax-free, compared with €0.23 previously. The higher amount applies retroactively from 1 January 2026.

Higher employer social security costs

Several employer contributions increase in 2027. For example, the employer healthcare contribution (Zvw) increases from 6.10% to 6.51%. The basic of contribution for disability insurance increases as follows:
– Small employers: from 6.27% to 6.67%
– Large employers: from 7.63% to 8.03%
Employers should therefore take slightly higher payroll costs into account when budgeting for 2027.

Additional employer tax on fossil-fuel company cars

From 2027, employers may face a new 12% pseudo-final levy calculated over the catalogue value of a fossil-fuel company car where the employee is also permitted to use the car privately. Cars made available before 1 January 2027 benefit from transitional protection until 31 December 2030. Several exceptions are proposed, including certain temporary replacement vehicles. This is an employer-side tax and is separate from the normal company-car benefit included in the employee’s taxable salary.

Electric company cars become less attractive

For new zero-emission company cars, the reduced benefit-in-kind percentage increases. In 2027:
– The benefit is 20% on a catalogue value up to €30.000
– The normal 22% rate effectively applies to the excess
In 2026, the reduced percentage was still 18%. From 2028, the remaining discount for electric company cars is scheduled to disappear entirely.

Property & transfer tax changes 2027

Lower transfer tax for investment and second homes

One positive change for property investors and buyers of second homes is a reduction in transfer tax. The rate for residential property that will not be used as the buyer’s main residence decreases from 8% in 2026 to 7% in 2027. The normal 2% rate for owner-occupied homes remains unchanged.

Starter exemption threshold increased

The 0% transfer tax exemption for eligible buyers aged between 18 and 35 remains available. The maximum property value qualifying for the exemption increases from €555.000 in 2026 to €615.000 in 2027.

Corporate tax & VAT changes 2027

Corporate income tax rates (unchanged)

For companies, the main corporate income tax rates remain unchanged in 2027:
– 19% on taxable profits up to €200.000
– 25.8% on taxable profits exceeding €200.000

Energy Investment Allowance increased

The Energy Investment Allowance (EIA) becomes more generous. The deduction percentage increases from 40% in 2026 to 45.5% in 2027, potentially providing an additional incentive for businesses investing in qualifying energy-efficient assets.

Innovation box simplification

Companies using the innovation box can choose to determine qualifying innovation profits using a simplified forfait. The maximum amount of qualifying benefits under this simplified method is proposed to increase from €25,000 to €100,000. Under the arrangement, 25% of the company’s profit can be treated as qualifying innovation box income, subject to the maximum. The effective innovation box rate remains 9%.

VAT

The general Dutch VAT rates remain unchanged in 2027:

• Standard VAT rate: 21%
• Reduced VAT rate: 9%
• Zero rate: 0%

There are several sector-specific VAT changes planned for later years. For example, the VAT rate on flowers, plants and other qualifying floricultural products is scheduled to increase from 9% to 21% from 1 January 2028.

Other notable changes in 2027

Net metering for solar panels ends

The Dutch net-metering scheme (salderingsregeling) for privately generated solar electricity ends from 2027. Until the end of 2026, electricity supplied back to the grid can still be offset against household electricity consumption for energy tax and VAT purposes. This system will no longer apply from 2027.

Pension lump-sum option delayed again

The legislation allowing individuals to withdraw up to 10% of their retirement pension as a lump sum at retirement has been postponed once again. The planned introduction date is now 1 January 2029.

Looking ahead: who is most affected in 2027?

For many taxpayers, the 2027 Budget Day changes consist mainly of relatively small adjustments to tax rates and thresholds. However, several groups will experience more substantial changes. In particular:

• Expats with a 30% ruling should check whether the move to 27% and the end of partial non-resident taxpayer status affect them
• Entrepreneurs will see a further reduction in the self-employment deduction and the virtual disappearance of the starter’s deduction
• Employers should prepare for higher payroll contributions and new rules concerning fossil-fuel company cars
• Owners of green investments will see almost the entire Box 3 exemption disappear
• Buyers of investment properties and second homes will benefit from the reduction of transfer tax from 8% to 7%

At the same time, uncertainty around the future of Box 3 continues, and further developments are expected during 2027.
The measures discussed above are based on the Budget Day proposals and the tax figures available immediately after Prinsjesdag 2026. They may still change before the legislation is finalised.

If you’re not sure how any of these changes affect your personal or business situation, we’re here to help. One of our tax advisers will be happy to walk you through what it means for you and help you plan accordingly.

About the Author

Alexander Zahariev is tax advisor at Dutch Tax Advice.