During the parliamentary process, some changes to the Tax Plans 2025 were made by the Ministry of Finance. In addition, members of parliament proposed various amendments and motions, some of which were adopted. These amendments, inter alia, result in the withdrawal of the following earlier proposed measures:

  1. eliminating the EUR 1 million threshold in the earnings stripping rule for real estate investment companies, which is financed by lowering the fiscal EBITDA cap to 24.5%; and
  2. disallowing the tax deductibility of charitable donations by corporates.

Moreover, it was agreed that alternative measures will be presented in spring 2025 to reverse the increase of the VAT rate for certain activities, i.e., culture, sports and media. Below, we discuss these changes to the Tax Plans 2025 in more detail.

Below, we discuss these changes to the Tax Plans 2025 in more detail.

Tightening of the earning stripping rule for certain real estate companies reversed

In the original Tax Plans 2025 an intricate antifragmentation rule was included as part of the earning stripping rule to tighten the deductibility of interest for certain real estate investment companies. This measure aimed to prevent taxpayers from using the EUR 1 million threshold multiple times. This proposed measure was withdrawn. In addition, a motion was passed which requests the government to investigate which measures other EU Member States have taken to tackle potential abuse of the earnings stripping measure.

Increase of the fiscal EBITDA cap from 20% to 24.5% instead of 25%

In order to finance the reversion of the abovementioned antifragmentation rule, the originally proposed increase of the fiscal EBITDA cap from 20% to 25% will be slightly lowered and the cap will now be increased to 24.5%.

Charitable donations by corporates: remain deductible but may impact shareholders with a substantial interest

In the original plans, it was proposed to no longer allow a deduction of charitable donations by corporates when driven by personal motives of its shareholders. This measure was reversed and is no longer part of the Tax Plans 2025. Therefore, subject to conditions, charitable donations by corporates remain tax deductible to a maximum of EUR 100,000.

We do note that the proposal to strike out the current legislative provisions to not treat charitable donations by a corporate as a distribution to its shareholders for dividend withholding tax and personal income tax purposes, has not been reversed. Hence, shareholders with a substantial interest should carefully examine the tax consequences of charitable donations.

Alternative budgetary measures for abolishment reduced VAT rate

Based on the Tax Plans 2025 the reduced 9% Dutch VAT rate for various activities will be abolished per 1 January 2026, and replaced by the standard 21% Dutch VAT rate. For more details we refer to our newsletter.

These changes, that would take effect as of 1 January 2026, are still included in the Tax Plans 2025, but it was agreed that in spring 2025 alternative measures will be presented in order to reverse the increase of the VAT rate for certain activities, i.e., culture, sports and media.

Concluding remarks

The Dutch House of Representatives made quite some changes to the original proposed Tax Plans 2025. This is a result of the fact that the coalition government has no majority position in the Senate and had to make concessions. It is now expected that the Senate will vote in favour of the Tax Plans in December.

We will keep you updated on any relevant further developments. Should you have any questions with respect to the above, please contact your trusted adviser.