Tax Plan 2026: Steps Towards a Better Tax System

To keep pump prices affordable, the fuel tax discount on gasoline, diesel, and LPG is extended by one year until January 1, 2027. The tax remains €0.79 for a liter of gasoline, €0.52 for a liter of diesel, and €0.19 for a liter of LPG, just like in 2025.

To finance the reversal of the VAT increase on culture, media, and sports, the brackets of the income tax and tax credits are not fully adjusted for inflation. As a result, people will fall into the next income tax bracket slightly earlier. The first income tax bracket will increase from €38,441 to €38,883 in 2026. The second income tax bracket will increase from €76,817 to €79,137 in 2026.

The tax scheme for foreign workers temporarily in the Netherlands (ETK scheme) will be tightened from 2026. Currently, there is no level playing field between employees who incur extra costs and those who do not, which is the goal of the scheme. Therefore, the scheme will be tightened by abolishing two cost items: the extra living costs, including gas, water, electricity, and other utilities, and additional communication costs for private purposes with the country of origin.

The cabinet wants wealth that is passed on through inheritance to reach the next generation in a fair manner. Therefore, several adjustments are being made within inheritance and gift tax. For example, constructions with unequal wealth distribution between partners upon death or divorce will be addressed. As a result, spouses will pay gift or inheritance tax on half of the community property at the end of the marriage, even if it is unevenly distributed on paper. The filing period for inheritance tax after death will also be extended from 8 to 20 months, giving survivors more time to file.

To ensure that the restitution of box 3 remains affordable, a few adjustments will be made in box 3. The tax-free allowance will decrease from €57,684 to €51,396. The deemed return on other assets will increase from 5.88% to 7.78%. Taxpayers can also make use of the rebuttal scheme in 2026.

To ensure that private equity managers pay sufficient taxes, the lucrative interest scheme will be adjusted. In the current situation, they pay less tax on the wealth they build as part of their salary than someone with wealth in box 3. The cabinet does not find this desirable. Therefore, several changes will be made to the so-called lucrative interest scheme so that the tax burden for private equity managers in box 2 will be equal to the tax rate in box 3, at 36%.

The Supreme Court ruled in March 2025 that more losses when closing subsidiaries may be deducted from the Dutch profit. To compensate for this setback in the liquidation loss scheme, the Aof premium will be increased by 0.08%. This is the mandatory contribution that employers pay to finance disability benefits, such as the WIA and WAO. Additionally, there is an intention to adjust benefits from exchange rate fluctuations on participations from January 1, 2027.

Through various measures for people and companies, further steps are being taken in the climate transition. However, consideration is given to the competitive position of companies. The cabinet wants the greening of the Dutch vehicle fleet to continue. Therefore, several measures are being taken to stimulate the use of emission-free cars. Employers will pay extra starting in 2027 if they offer their employees a non-electric car. The reduction in motor vehicle tax will be increased from 25% to 30%. Additionally, the reduced BPM rate for emission-free cars will also apply to emission-free special passenger cars and motorcycles. At the same time, the BPM rates will be adjusted to ensure that there is still sufficient incentive to make fuel cars more economical.

The flight tax will have different rates for short, medium, and long flights. For shorter flights, you will pay less tax than for longer flights. For a short flight, starting in 2027, you will pay €29.40 per flight, such as flights to Portugal and Denmark. For a medium-haul flight, such as to Egypt and Turkey, you will pay €47.24 per flight. For long flights, such as to Mexico and South Africa, you will pay €70.86. Longer flights to the Caribbean part of the Kingdom will fall under the lowest rate.

Starting in 2026, companies will pay tax on a larger portion of the drinking water they use. The tax ceiling will increase from 300 cubic meters to 50,000 cubic meters. In 2027, the tax ceiling will be completely abolished, meaning companies will then pay tax on all the drinking water they use. Additionally, by 2030, the waste tax for waste processors will increase, and waste incineration plants will pay more CO2 tax. The cabinet is open to alternative taxes. For all other companies within the CO2 tax, the rate will be reduced.

In the excise tax on non-alcoholic beverages, the scheme that allows manufacturers to add a touch of dairy to evade taxes will be addressed. This will be done by adjusting the exemption for dairy and soy drinks. After the adjustment, water, milk, buttermilk, and comparable soy drinks will remain exempt from tax.

The Tax Plan will be discussed in the House of Representatives after the election recess. In December, it will be discussed in the Senate. Only after approval from both Houses will the plans be final.