Consultation On Legislative Proposal On Tax Incentives For Dutch Startups And Scale-ups

The Dutch government launched a public consultation on a legislative proposal aimed at stimulating innovation and business growth (Wet fiscale stimulering startups en scale-ups). Recognising that a significant part of future economic growth depends on the success of startups and scale-ups, the proposal seeks to improve conditions for early-stage financing and talent retention through two targeted fiscal measures.

First, the proposal introduces a revised definition of startups and scale-ups for the purposes of a capital gains-based regime under Box 3, replacing the standard accrual-based taxation. Second, it introduces a fiscal incentive for employee stock option plans, comprising a reduced tax burden on option gains and a deferral of the taxable moment to the point of actual share disposal.

Definition of startup and scale-up
An enterprise qualifies as a startup or scale-up if it operates a scalable and repeatable business model derived from innovation, i.e., the development or improvement of products, services, processes or technologies involving technical novelty or significant functional improvement relative to the sector. 

A scalable business model refers to the ability to achieve rapid revenue growth without a proportional increase in resources or costs, by leveraging technology that delivers lower marginal costs and economies of scale. Relevant indicators include, for example, whether the enterprise benefits from existing innovation schemes such as the WBSO (wage tax credit for R&D activities) or the innovation credit, or whether it has received venture capital from private equity firms.

The definition of startup or scale-up is relevant for the purposes of both the relief from taxation on employee stock options and the Box 3 regime applicable to savings and investments which will be discussed below. 

Employee stock option relief
Under the current regime, stock options granted to employees are taxed as employment income at progressive rates of up to approximately 49.5%. The taxable moment for wage tax purposes arises not upon the sale of the shares acquired through the exercise of the options, as is common in other jurisdictions, but rather, in principle, when the shares obtained upon exercise of the option become tradeable, often well before the employee has realised any proceeds. This creates a cash-flow mismatch and is widely regarded as a competitive disadvantage relative to other European jurisdictions, where option gains are typically taxed at lower rates or treated as capital gains.

The proposed legislation addresses these shortcomings by including only 65% of the capital gain realised by employees of qualifying startups and scale-ups in the taxable base. In addition, the taxable moment is deferred until the shares are actually sold. Investment instruments which qualify as a lucrative interest are excluded from the new rules. 

Box 3 – savings and investments
The proposed new tax rules on savings and investments (Wet werkelijk rendement box 3), expected to enter into force as of 2028, have been subject to considerable debate. One of the key mechanisms under these rules is the taxation of unrealised capital gains, including increases in the value of shareholdings. Investments in startups and scale-ups are, however, typically highly risky, illiquid and subject to significant fluctuations in value, particularly during the early growth phases, when these companies often generate little or no cash flow or profit. To address this, the proposed rules provide for an exception to the unrealised capital gains regime for shareholdings (broadly, holdings below 5%) in startups and scale-ups, which will instead be taxed on a realised capital gains basis.

Next steps
The public consultation is open until 29 April 2026, during which period interested parties are invited to submit their comments. Following the close of the consultation, the government is expected to proceed with the next stages of the legislative process. 

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