There is little new under the tax sun. Therefore, the year-end tips for 2025 are not much different from those for 2024. But we like to bring some things to your attention.
The bills under the 2026 tax plans, apart from the bill related to reversing the increase in the VAT rate on culture and sports, are still pending in the Lower House. They will be debated by the Lower House in its post-election composition. Perhaps there will be surprises then after all.
Donate
Gift tax exemptions may be reused every year. Therefore, for the purpose of tax-friendly wealth transfer, it makes sense to gift (at least) the amount of the exemption each year. The gift tax exemption amounts in 2025:
| Donation by parent to child | € 6.713 |
| Donation to beneficiaries other than children | € 2.690 |
Children can be given one-off exempt gifts of up to a higher amount between the child's 18th and 40th birthday. This exemption will amount to €32,195 in 2025. The regular exemption of €6,713 will then lapse in that year.
The portion of a gift above the amount of the exemption is subject to gift tax. The gift tax rate for 2025 is:
| Taxable amount up to € 154,197 | 10% |
| Taxable amount above € 154,197 | 20% |
For both the exemption and the rate, donations made in the same year are added together. If the total gifts in a year exceed the exemption of €6,713 or €2,690, a gift tax return must be filed within 2 months of the end of the year.
WOZ value
With effect from 1 January 2027, the legislator intends to stop using the WOZ value in donations of residential property. Instead, the appraised fair market value will (again) become the starting point. This measure is included in a bill that has not yet been submitted to Parliament.
For inheritance tax purposes, the WOZ value does remain the mandatory valuation for residential properties.
Dividends from your limited company
The substantial interest rate (box 2) will not change in 2026. Substantial interest income is taxed at a rate of 31%, but a lower rate of 24.5% applies up to €67,804. In view of this rate step-up, it is interesting to pay dividends up to €67,804 (tax partners up to €135,608) in 2025.
BUT income from substantial interest will count towards the reduction of the general tax credit from 2025. The general tax credit (AHK) is €3,068 in 2025 (for state pensioners €1,535). The AHK will be phased out by 6.337% (AOW recipients: 3.169%) of the aggregate income above €28,406. Including the phase-out of the AHK, the dividend is then taxed at a rate of: 24.5% + 6.337% = 30.837 (almost 31%). There is then (virtually) no rate advantage left.
For the elderly, in addition to the phasing out of the AHK, the phasing out of the elderly tax credit may also come into play. That discount will be €2,035 in 2025 and will be phased out by 15% of the aggregate income above €45,308.
Corporate structure
The end of a year is a great time to review whether your company is still in the right legal structure?
Do you have a sole proprietorship or VOF/partnership that would be better run in the form of a BV? From a tax point of view, this may have advantages. But limiting liability as much as possible with your private assets may be an equally important consideration.
The opposite route is also possible. If the BV is no longer the most tax-efficient legal form for your company, you can revert (silently) to a sole proprietorship or VOF/partnership. Just remember your liability risks.
Adjustments can also make sense within a BV structure. For example, partly with a view to liability risks, it may be useful to create a holding structure or a structure with an intermediate holding company. In corporate tax, there is still the rate step-up that can make it interesting to distribute profits over several BVs.
Business succession
New round, new opportunities; so the saying goes. That “new round” is coming after the elections and one of the tax schemes that may be changed by the new Cabinet concerns tax facilities in the context of business succession.
Those facilities concern the silent transfer of the substantial interest benefit in income tax. But there is a particular focus on the conditional exemption under inheritance and gift tax. After all, when the continuation requirement is met, that tax is definitely off the table (for acquisitions after 31 December 2024, the continuation requirement has been shortened from 5 to 3 years).
Whether the new Cabinet will cut back on business succession facilities is of course a matter of conjecture.
Box 3 (income from savings and investments)
This box remains undiminished. In both 2025 and 2026, the main rule is that you pay tax based on your flat-rate income from savings and investments. But you are allowed to provide rebuttal evidence that your actual return on your assets in Box 3 is lower, but with the specific (sometimes somewhat special) rules laid down by the Supreme Court in its rulings. In 2025 and 2026, the reliance on the actual return can be made directly in the tax return, where up to and including 2024, it has to be done (far) afterwards by means of the Statement of Actual Return (OWR) form.
The Box 3 system in place until 31 December 2027 (probably) may offer opportunities to reduce the levy. The crux of this is that you concentrate the receipt of income in the same year, which means you enjoy (virtually) no income in other years. This is because the actual return is determined on a cash basis. This can be done by closing savings accounts at a good time or by selling rental deposits to your own limited company.
With effect from 2026, the standard rate of return for other assets is increased by 1.9% points. For 2025, this flat rate of return is: 5.88%. In 2026, it will be: 7.78% (noting that this rate for 2026 is yet to be determined).
With effect from 2026, a notional value will be taken into account for the private use of your holiday home, assuming the home is at your disposal for the whole year. The notional value of your private use will be set at around 5% of the WOZ value of your holiday home.
Premium/investment annuity
Since a few years, the possibilities for tax-friendly (additional) savings for your pension have been significantly widened. In 2025, premiums for annuity insurance and contributions to an annuity bank savings account are deductible within the annual and reserve margin if they are paid or deposited no later than 31 December 2025. Do have a check to see what the annual and reserve margin is in your situation.
Premiums or deposits related to the conversion of a (tax) retirement reserve and/or the cessation of a business in 2025 must be paid or deposited by 30 June 2026.
Excessive borrowing
The director-major shareholder who borrows from his own BV(s) must also keep an eye on the excessive borrowing threshold in 2025. What matters for this is the total amount of debt outstanding with the BV(s) on 31 December 2025.
The threshold is, as in 2024, €500,000, avoided by the taxable owner-occupied home debt. If the total debt exceeds the threshold, the excess is taxed as income from substantial interest.
If you paid substantial income tax on a benefit from excessive borrowing for 2023 or 2024, it may make sense to secure your rights with a timely pro forma objection. After all, this scheme could just be declared contrary to EU rules.
Cars
A new so-called pseudo final tax will be introduced for cars provided to employees with effect from 1 January 2027. That levy is payable in full by the employer, amounts to 12% of the catalogue value of the car and must be paid each year. The pseudo final levy is payable for cars that are not fully electrically powered.
The pseudo final tax is not due for cars used exclusively for business purposes (0.0 private kilometres!). But REMEMBER for the purpose of this scheme, commuting kilometres are considered private kilometres.
There is a transitional arrangement. For cars made available to employees before 1 January 2027, the pseudo final tax will not be due until the car changes employer or until 17 September 2030 at the latest. It is therefore important to take the pseudo final tax into account for lease contracts entered into from now on.
From 1 January 2026, the percentage of the additional taxable benefit for the private use of electric cars will change. That addition in 2025 will be 17% on the first €30,000 of the list price and 22% above that. For electric cars registered on or after 1 January 2026, the addition will be 22% on the total list price.
VIDA
VIDA stands for VAT in the digital age. This package of measures was adopted by the European Council in March 2025 and will be phased in over the next few years in all European Union member states (with 1 January 2035 as the target end date). The aim is for invoice flows to go fully digital. These will be genuine e-invoices, not invoices packaged in PDF format and sent via e-mail.
In the Netherlands, the introduction of the first components from VIDA is currently scheduled for sometime in 2028. However, several member states are already busy introducing mandatory e-invoicing, mainly for domestic transactions for now. International entrepreneurs may therefore be confronted with e-invoices earlier.