Higher taxes on petrol and diesel cars and more news from Prinsjesdag 2026

These are the main changes that will affect businesses in 2027

Travel allowance already increased to 25 cents

Do you, as a self-employed person, use your private car for business travel? If so, you may deduct €0.25 per business kilometre from your profits. Employers may reimburse  staff up to €0.25 per kilometre tax-free for business journeys and commuting. That is an increase of 2 cents. This increase applies retroactively from 1 January 2026, as this decision was announced earlier.

Work-related expenses scheme to be expanded in 2027

Do you employ staff? If so, you may give your employees a little extra without paying tax on it. This is done via the work-related expenses scheme (WKR). This amount is known as the 'discretionary margin' (vrije ruimte) and is calculated as a percentage of the wages you pay.. In 2027, this free allowance will be increased from 2% to 2.16%, up to a total wage bill of €400,000.  For wages above €400,000, the percentage remains unchanged at 1.18%. Certain allowances, such as removal costs, public transport season tickets, and meals during overtime, may be reimbursed outside the discretionary margin.

Ending of compensation for transition payments postponed

Employers can apply to the Employee Insurance Agency (UWV) for compensation for a transition payment made in the event of an employee’s dismissal following long-term incapacity for work. Or in the event of the termination of employment due to retirement or death. This scheme was due to be end on 1 January 2027. This date has now been postponed to 1 January 2028.

Higher tax on petrol and diesel cars

The government wants new cars offered by employers from 2027 onwards to be zero-emission. Employers will therefore pay an extra tax on new petrol and diesel cars from 2027. This is known as a pseudo-final levy (pseudo-eindheffing). This tax is 12% of the car’s list price per year. It applies to cars that employees also use for commuting and private journeys.

A transitional arrangement applies to petrol and diesel cars that are already in use by employees before 2027. Until 31 December 2030, employers will not have to pay any extra tax on these vehicles.

Energy Investment Allowance (EIA) to increase

The Energy Investment Allowance will increase from 40% to 45.5% with effect from 1 January 2027. This means that businesses and entrepreneurs may deduct 45.5% of the investment costs they incur in energy-saving and CO2-reducing measures from their profits. This gives entrepreneurs extra support for sustainability measures.

End of the biofuel refund scheme

Fuels consisting (in part) of biofuels or renewable fuels have a lower energy content than fossil fuels. You can travel a shorter distance with a litre of these fuels. But you must still pay the same amount of excise duty on them. The excise duty refund scheme for bio- and renewable fuels was introduced to compensate for this disadvantage.

The government intends to end this refund scheme with effect from 1 January 2027. The scheme involves a great deal of administrative work, is prone to fraud, and few people or businesses make use of it.

Net metering scheme to end in 2027

From 2027, owners of solar panels will no longer be able to offset self-generated electricity against their consumption (known as the salderingsregeling). They will not have to pay tax on this until the end of 2026. They will, however, receive a payment for feeding electricity back to the energy supplier. They do not pay tax on electricity that they generate themselves and use immediately.

No road tax for trucks, lower road tax for vans

Do you own a truck weighing more than 12,000 kilograms? If so, you will not have to pay motor vehicle tax (motorrijtuigenbelasting, MRB) in the second half of 2026. The Government is introducing this measure because fuel prices are much higher due to the war in the Middle East. The truck charge, which came into force on 1 July, will remain in place. Since that date, trucks weighing between 3,500 kg and 12,000 kg have no longer been liable for motor vehicle tax anyway. Do you own a van weighing up to 3,500 kg? If so, you will temporarily pay half the usual amount of motor vehicle tax.

Lower tax on rental properties

Are you a property developer or investor looking to rent out homes or invest in rental properties and new builds? If so, you will be subject to property transfer tax (overdrachtsbelasting). The government intends to reduce this tax from 8% to 7%. This rate applies to properties that you do not use as your main residence. The rule applies to property developers, investors, and housing associations that build or purchase rental properties.

Withholding rent from migrant workers’ minimum wage to end

Employers will no longer be permitted to deduct rent from workers’ wages. According to Minister Vijlbrief, many migrant workers are currently too dependent on their employers forhousing. Employers currently regularly deduct the maximum amount (25% of the minimum wage) from wages. This amount, when used as rent, is often too high for the quality of the accommodation. The government intends for the law to come into force on 1 July 2028, at the same time as the Act on Appropriate Tenancy Agreements for Better Tenant Protection. 

Reduction in the expat scheme for highly skilled foreign workers

Highly skilled foreign workers (expats) working temporarily in the Netherlands can receive an annual tax-free allowance from their wages via their employer. This allowance is being reduced from 30% to 27% of the maximum tax-free portion of their salary.

The expat scheme is intended to compensate employees for, for example, travel expenses and additional costs for accommodation and living expenses. For example, many expats must rent a house in the Netherlands whilst also owning a home in their own country. They are eligible to receive the allowance for 5 years.

Changes to the youngtimer scheme

Do you have a company car that is 16 years old or older, a so-called 'youngtimer'? If so, you can make use of the youngtimer scheme. The age limit for this scheme is being raised:

• From 1 January 2027, the scheme will apply to cars aged 17 years or older.
• From 1 January 2028, the scheme will apply to cars aged 20 years or older.

Previously, the plan was to raise the age limit to 25 years, but that has been scrapped.

Air travel tax remains

Anyone travelling by air from the Netherlands in 2027 will have to pay an extra tax on these journeys, just as in 2026. The government aims to make air travel less attractive through this tax, in order to protect the environment.

The air travel tax has 3 tiers, with the longest journeys being the most expensive. The rate increase for the longest journeys will be lower.

There are 3 types of air travel: short, medium, and long. These are the proposed rates:

• short (under 2,000 kilometres): €31.04
• medium (between 2,000 and 5,500 kilometres): €49.87 
• long (over 5,500 kilometres): €59.54 

Tax on tap water to rise

The government wants to increase the tax rate on tap water by €0.11 to €0.537 per cubic metre (m³) in 2027. According to the government, this will mean an average household will pay €15 more in tax per year.

Also, from 2027, you will pay tax on all the tap water your business uses. The tax ceiling of 50,000 m³ of tap water will end.

In 2026, you only pay tax on the first 50,000 m³ of tap water you have used in 2026. If you use more than 50,000 m³ of water, you will not have to pay tax on that extra amount in 2026. In 2025, you only paid tax on the first 300 m³ of tap water your business used.

Beer brewing to become more expensive for small breweries

The government intends to end the reduced excise duty rate for small breweries with effect from 1 January 2027. Small, independent breweries (up to 200,000 hectolitres per year) currently still receive a discount of approximately 7.5% on beer excise duty. That benefit will be withdrawn.

Alcohol excise duty to rise in line with annual inflation

From 1 January 2027, the excise duty on alcohol will rise in line with annual inflation. Inflation is the rise in the price of goods, meaning that people can buy less with the same amount of money. This measure will affect businesses that sell and produce alcohol. If excise duty rises in line with inflation, you will pay a higher amount of excise duty for the same quantity of alcohol. You can pass on the excise duty to your customers.

VAT on flowers to rise

Are you a trader in the flower trade or do you sell flowers and plants? The VAT on flower trade goods (sierteeltproducten) will change. The government plans to end the low VAT rate of 9%. The standard VAT rate of 21% will then apply to all horticultural products, such as:

• flower bulbs, cut flowers, and plants
• indoor and balcony plants
• bed plants and perennials
• imported horticultural products

Please note: do you export horticultural products abroad? Then this VAT increase does not apply.

When will the new plans take effect?

A legislative amendment must first be approved by the Lower and Upper Houses of Parliament (Tweede en Eerste Kamer). After publication in the Staatsblad or Staatscourant (Government Gazette, in Dutch), the law can take effect.

An Order in Council (Algemene Maatregel van Bestuur, AMvB) or ministerial decree also applies only after publication in the Staatsblad or Staatscourant.

Find out more

Visit Business.gov.nl to see the complete overview of government plans that are important to your business. Or find out more about Budget Day on KVK.nl.