Interest expenses are currently capped under the earnings stripping rules to the highest of

(i) 20% of a taxpayer's EBITDA (adjusted for tax purposes); or

(ii) EUR 1m.

Based on the legislative proposal, the EBITDA threshold will be increased to 25% in order to bring the Dutch earnings stripping rules more in line with the implementation in other EU Member States. On the other hand, for real estate entities the rules will be tightened. Real estate entities are no longer allowed to apply the EUR 1m threshold as per 1 January 2025. For this rule, entities qualify as real estate entities if the assets mainly (70% or more) consist of Dutch real estate assets that are rented out (for at least half of the year) to third parties. In order to determine the assets of the entity, participations, receivables granted to related parties and foreign real estate are excluded.

The concurrence between the loss offsetting rules and the exemption for waiver profits can in certain cases complicate the restructuring of a loss-making company, ie, if claims on that company are waived, which results in a waiver profit. Due to the current loss offsetting rules, waiver profits can still result in corporate income tax despite the existing exemption for waiver profits. Based on the legislative proposal, a new waiver profit exemption scheme will be introduced for taxpayers with losses exceeding EUR 1 million. Under this scheme, waiver profits will be fully exempt to the extent that these profits exceed the losses from the previous year. Additionally, the carry-forward losses from the past will be reduced.

The 'general anti-abuse rule' (GAAR) from the Anti-Tax Avoidance Directive (ATAD1) will be incorporated into corporate tax law. When implementing ATAD1 in 2019, the Netherlands opted not to include the GAAR in legislation, as the fraus legis doctrine already achieved the same goal. Following input from the European Commission, statutory anchoring will now be provided. This proposal does not aim to introduce any material changes in the concept of fraus legis in the Netherlands.

The Budget Day package confirms the enactment of the new partnership classification rules per 1 January 2025. Further legislative guidance is still expected in the form of a Decree from the Ministry of Finance, which will outline more specific criteria on how foreign partnerships should be classified going forward.

(In)direct payments of dividends, royalties or interest towards affiliated companies in (i) non- cooperative jurisdictions (EU list) and (ii) low taxing jurisdictions (Dutch list) are subject to a Conditional withholding tax (25.8%). Included jurisdictions are, for example, Bermuda, Cayman, Guernsey and Jersey.

“Affiliation” is determined by the presence of a so-called qualifying interest, which requires a stake enabling to determine the activities. This qualifying interest can currently also be determined based on the presence of a so-called cooperating group. This concept has turned out to be unclear in practice, in many cases for Conditional withholding tax purposes. Therefore, the government now proposed to replace the concept of 'cooperating group' for the Conditional withholding tax with a new, narrower and distinct group concept: “Qualifying Unit” (“Kwalificerende eenheid"). Under this concept, the interest held by a group of entities should only be consolidated if the entities (i) act together with (ii) the principal purpose or one of the principal purposes to avoid tax for one of these entities. This significantly increases the threshold for consolidation of interests held by separate entities, compared to the current collaborating group concept which has a broader range. This anti-abuse test should thus provide more arguments in genuine fund structures to substantiate that no consolidation of interest between the investors should arise.

The burden of proof regarding the presence of such a qualifying unity lies with the tax inspector.

The Government Program (“Regeerpgrogramma") has announced the proposal to reduce the real estate transfer tax (RETT) rate for investments in residential real estate from 10.4% to 8% as per 1 January 2026. For investments in other real estate (such as commercial or logistic real estate) the RETT rate remains 10.4%. Also, the rates for real estate acquired by an individual that uses the real estate as its primary residence, remains unchanged (ie, a 2% rate applies).

The RETT (de)merger exemption aims to prevent obstacles for companies aiming to restructure. The conditions for this exemption will become stricter, which means that the proposed conditions are:

• the acquired shares must be held for a three-year period (“retention requirement");
• the real estate must be transferred as part of a business (“business requirement"), and
• the business must be continued for a three-year period (“continuation requirement").

The exemption does not apply if a succession of different legal acts (merger, demerger, internal reorganization) is predominantly aimed at tax avoidance.

The exemption does also apply to a so-called disputed demerger (ruziesplitsing) resulting in a separation of the shareholders. In such cases the business requirement does not apply. Although no part of the formal Budget Day plans, based on the attachment to the Budget Statement (“Miljoenennota"), likely the new rules come into effect as per 1 July 2025.

The Dutch Tax Plan 2025 introduces a revision period for VAT deduction on investment services for real estate. This means that the VAT deduction for investment services must be monitored for a period of approximately five years. The revision period will apply to investment services that exceed the threshold amount of EUR 30,000 and have a sustainable character. Examples include renewing, enlarging, repairing or replacing and maintaining real estate, painting window frames and doors on the outside or inside, soil or asbestos remediation, installing kitchens and bathrooms (sealing), insulating, and facade or roof renovation. Demolition work related to a renovation is also included. Based on recent case law, we foresee discussions about the definition of 'investment services' and the five-year revision period.

For the applicability of this regulation, the service acceptance date is considered crucial. The regulation can therefore also apply to services that started before 2026, such as major renovations or refurbishments.

As a result of this new legislation, we foresee an increase in administrative burdens for the real estate sector and for all entrepreneurs who own or rent real estate.

The reduced VAT rate for accommodation within the framework of the hotel, pension, and vacation industry and for certain cultural goods and services will be abolished as of 1 January 2026. This means that these services, and in some cases the rental of accommodations, will be taxed at the general rate of 21%. Camping will remain taxed at the reduced rate of 9%.

Part of the 2024 Tax Plan was already the changes in the RETT/VAT concurrence exemption. These changes come into force per 1 January 2025 as well. Based on this new legislation, the exemption from transfer tax is being adjusted to create a level playing field between share transactions and real estate transactions. This concerns situations where a company holds newly developed real estate and instead of the real estate itself ('the bricks'), the shares are transferred. In such cases, neither VAT nor transfer tax is due. The change means that if the real estate in the company is used for less than 90 per cent for VAT-taxed services (such as the rental of housing or real estate in the education or healthcare sector), the acquisition of the shares is taxed with 4 per cent transfer tax.