Key tips for individuals

Donations: profiting from (annual) exemptions and/or rates 

Donating reduces your assets and allows you to take full advantage of exemptions and progressive rates for the gift tax. Annually, you can donate up to € 6,713 (2025) tax-free to your children. In all other cases, you can make an annual tax-free donation of € 2,690 (2025). For donations from parents to children up to the age of 40, a one-time increased gift tax exemption of € 32,195 (2025) applies under certain conditions. 

If the donation exceeds the limits stated above, the excess is taxed. For excesses up to € 154,197 (2025), the rate is set at 10 per cent (donation to partner or child), 18 per cent (donation to grandchild) or 30 per cent (donation to others). If the donation exceeds the € 154,197 threshold, the remaining amount will be taxed at a 20 per cent (donation to partner or child), 36 per cent (donation to grandchild) or 40 per cent (donation to others) tax rate. 

Donation via notarial deed of debt 

By donating via a so-called notarial deed of debt (schuldigerkenning), the liquidity burden can be limited. The donated amount is, as it were, immediately lent back from the recipient. With a donation via a notarial deed of debt, the donor is fiscally obliged to pay 6 per cent interest to the recipient annually. This interest must actually be paid. A favourable effect is that the obligatory annual interest payment actually constitutes a gift tax-free asset transfer. Of course, the liquidity burden of the annual lifelong interest obligation as well as the pressure this can put (also in a later stage of life) on the donor's asset position must be taken into account. 

The acknowledged amount of debt represents a claim for the person receiving it. In principle, this claim is only due upon the death of the donor. The amount of debt constitutes a debt in box 3 of the income tax for the donor and an asset in box 3 for the recipient. Currently, debts are subject to box 3 taxation at a lower flat rate than corresponding receivables (unless the actual return is lower). With this, box 3 neutrality at the family level is lost in principle. However, if potential savings on inheritance tax, the limited liquidity burden, and the annual interest payment are taken into account, donating via notarial deed of debt out of generosity may still be an interesting option. 

Interest payment due to donating via notarial deed of debt 

When a donation is made via a notarial deed of debt, the donor is fiscally required to pay 6 per cent interest to the recipient annually. In order to prevent the donor from retaining the enjoyment of the donation, the interest due must be paid. The end of the year is a suitable time to pay this gift interest. Keep the bank statements showing the interest payments in your administration. 

Charitable donations 

If you make a private donation to a non-profit organization (a public benefit organization - ‘ANBI’, or a support foundation for socially beneficial organizations - ‘SBBI’), you can under certain conditions apply the gift deduction in for personal income taxation purposes. A distinction is made between regular donations and periodic donations. Periodic donations must be established in writing for a period of at least five years and the deduction is limited to € 1,500,000 per year. The deduction of ordinary donations is limited by a threshold and a ceiling that depends on your income. By donating to charities this year, you can save on personal income tax. Furthermore, if you make a donation to a cultural public benefit institution the tax deduction will consist of the amount of the donation increased by 25 per cent (up to a maximum increase of € 1,250). 

Charitable donations from own company 

If you make a donation from a private limited company (bv) to a charitable organization (a public benefit organization - ‘ANBI’, or a support foundation for socially beneficial organizations - ‘SBBI’) without a business motive, this donation will be classified as a taxable dividend payment to the shareholder if it exceeds the maximum gift deduction in the corporation income tax return. This amounts to a maximum of 50 per cent of the profit, with a maximum of € 100,000.    

Optimising box 3 position 

Currently, there are two ways to determine the return on your assets for personal income tax purposes in box 3. Under the statutory tax regime, your income in box 3 is determined on a flat rate basis. However, the Dutch Supreme Court has ruled that your income in box 3 must be taxed based on your actual return if your actual return is lower than the flat rate return. The Dutch Tax Authorities published a special form which must be utilised to demonstrate your actual return in box 3. 

However, for the 2020 tax year, there is a point of attention: should your actual return in 2020 be lower than your flat rate return, you will still have to submit an ex officio reduction request to the Dutch Tax Authorities no later than this year (2025).  

You can still optimize your flat rate return for the 2026 tax year in 2025, because your assets on 1 January 2026 will determine your flat rate return for the whole 2026 tax year. For example, by investing in green investments (exempt in 2026 up to € 26,715 per person; € 53,430 for tax partners combined) or by making gifts or larger purchases in 2025, you will reduce your box 3 tax in 2026. 

Dividend payments 

In income tax, the highest box 2 rate for dividend payments will remain unchanged at 31 per cent as of 1 January 2026. This rate applies to incomes above € 68,843 (€ 137,686 for tax partners). The lower box 2 rate of 24.5 per cent (for incomes up to € 68,843 / € 137,686) will also remain unchanged compared to 2025. If you are considering a dividend payment that exceeds the first bracket, you may consider to spread this dividend payment over 2025 and 2026 in order to take advantage of the low rate in 2025 and 2026. Please note that from 2025 onwards, dividend payments may also affect the amount of your general tax credit and the elderly tax credit. 

Excessive borrowing from own company 

Since 2023, excessive borrowing from your own company has been discouraged with the introduction of specific legislation. Substantial interest holders are required to pay (additional) personal income tax in box 2 if they have borrowed more than € 500,000 (2024: € 500,000) from their own company on the reference date (31 December). Loans to related persons can also count towards this. The levy can be avoided by repaying debts to your own company before the end of this year. Reducing your debts may also be useful for your personal financial position. 

Indirect lucrative interests 

The effective rate for income from indirectly held lucrative interests will be increased in box 2 through the introduction of a multiplier. With effect from 2026, this multiplier will lead to an increase to 28.45 per cent (instead of 24.5 per cent) in the first bracket of box 2 or 36 per cent (instead of 31 per cent) in the second bracket of box 2. If dividends from indirectly held lucrative interests are distributed to the shareholder in 2025, this could result in tax savings. However, this is subject to the condition that at least 95 per cent of the dividends received by the holding company in 2025 are distributed to the shareholder. 

Salary for directors-major shareholders 

If you work for your own company, you are expected to receive a wage that is ‘customary’. This customary wage is subject to Dutch payroll taxes. For taxation purposes, the customary wage is at least the highest of the following amounts: 

• the wage from the most comparable form of employment; 
• the salary of the most earning employee within the company; 
• the statutory amount of € 56,000 (2025). 

If you can prove that the highest of these three amounts exceeds the salary from the most comparable form of employment, the customary wage is set at the salary from the most comparable form of employment. The end of the year is a good moment to check whether your salary from your own company meets the criteria for the customary wage regime. 

Implementation of periodic settlement clause 

If the prenuptial agreement includes a periodic settlement clause, it is advisable to implement it in a timely manner. On the basis of a periodic settlement clause, spouses must divide the income saved in the past year with each other according to their agreement. The new year is an appropriate time to draw up the annual financial balance. In practice, spouses often fail to give effect to a periodic settlement clause during the marriage. In that case, it is advisable to clean up. 

Want to know more about the above year-end tips? 

Would you like to know more about a subject from these year-end tips? Your Forvis Mazars tax advisor is more than happy to assist you further.