New Box 3 tax could force startup staff, early investors to pay tax on unsold shares
Dutch startups and scale-ups are raising alarms about a new tax system set to take effect in 2028, warning it could saddle employees and early investors with large tax bills on shares they cannot easily sell. The concerns center on a revised Box 3 regime approved earlier this month by the Tweede Kamer, according to the FD.
The legislation overhauls how the Netherlands taxes income from savings and investments, known as Box 3. The current system taxes people on an assumed return, not what they actually earn. In 2021, the Hoge Raad ruled that approach unlawful, prompting the government to redesign the tax.
The current system taxes people on a notional return, not what they actually earn, as calculated by the Belastingdienst, the Dutch tax office.
Startups say the change creates acute problems for people holding equity in young, fast-growing companies. Many such firms unexpectedly fall outside an exemption included in the bill, meaning staff and early backers could owe tax on sharp increases in share value even when those shares cannot be readily sold. As a result, shareholders may have to pay the tax out of personal savings or even take out loans to cover the bill.
Employees are also uneasy, said Michiel Muller, co-founder of online supermarket Picnic. “We have many international people who are asking what this means for them. That is entirely logical,” Muller told FD. “The same thing happened when the 30 percent ruling for expats was going to be scaled back. People come here because we offer a whole package of conditions. It is problematic when several elements of that threaten to shift multiple times.”
