Dutch Budget Day 2024: proposed changes for 2025

On 17 September 2024 (Budget Day 2024), the Dutch Ministry of Finance submitted the 2025 Dutch Budget to parliament. This budget contains various tax proposals for the coming year (Tax Plans 2025).

A couple of days earlier, on 13 September 2024, the government published its coalition program recognising that a strong business climate is indispensable to preserve a stable Dutch economy and healthy companies. The government promotes a solid and predictable (fiscal) policy, for example when it comes to corporate tax rates and the innovation box.

The most relevant proposals for corporate taxpayers relate to the deductibility of interest payments, a new group definition in the Withholding Tax Act 2021 (WTA 2021), an extension of the related-party definition in the Corporate Income Tax Act (CITA), the incorporation of the latest OECD Pillar Two Guidance in the Minimum Tax Act 2024 (MTA 2024), and the interaction of the Pillar Two rules with the ‘subject-to-tax rules’ in the CITA.

In addition, some previously adopted changes were reversed or relieved, such as changes to the tax-free repurchase facility for listed entities and certain personal income tax rates. It is furthermore announced that the expatriate regime will become more attractive again.

The proposed measures will, if adopted, enter into force as of 1 January 2025, unless indicated otherwise.

Apart from these proposed measures, some significant changes in tax law that were already adopted in 2023 as part of the Tax Plans 2024, will enter into force as of 1 January 2025. These measures include the changes in the classification rules for Dutch limited partnerships, comparable foreign entities, and Dutch funds for joint account.

Below key measures in the Tax Plans 2025 and some of the already adopted changes are described in more detail.