Additional personal income tax measures under the 2027 Tax Plan

Box 1 (income form work and home) 

• Increase in the threshold of the third bracket in Box 1: The threshold of the third bracket in Box 1 will increase to € 80,578 (2026: € 78,426). The rate for the third bracket remains unchanged at 49.50 per cent. 
• Adjustment of the increase in the employed person’s tax credit: The increase in the employed person’s tax credit announced on Budget Day will be € 133 instead of € 173. The employed person’s tax credit applies to those receiving wages, profits from a business and income from other activities. 

Box 2 (substantial interest) 

• Reduction of the Box 2 rate: In Box 2, the rate in the second tax bracket will be reduced to 29.2 per cent for a period of four years (2026: 31 per cent). From 2031, the 31 per cent rate will apply again. In 2026, the second bracket will apply to, amongst other things, dividend payments from € 68,843 (2026; forecast for 2027: € 69,703). The rate in the first bracket remains at 24.5 per cent. The lower rate is intended to encourage director principal shareholders to withdraw capital from their private limited company at a lower rate. 
• Reduction in the threshold for excessive borrowing from one’s own private limited company: The threshold for excessive borrowing from one’s own private limited company will be reduced in five annual increments of €80,000. The so-called ‘excessive borrowing scheme’ will be amended accordingly. The current threshold is €500,000. From 2027, this threshold will be € 420,000. From 2031, the threshold will then be € 100,000. If a director principal shareholder borrows more than the threshold amount, they will be liable for income tax in Box 2 on the excess amount borrowed. Qualifying loans for the purpose of financing a principal residence remain exempt from this scheme. 

Box 3 (savings and investments) 

• Expansion of capital gains tax in Box 3: Under the future Box 3 system, the proposed capital gains tax system will also apply to financial instruments, such as shares, bonds and options, from 2028 onwards. As a result, income tax will only be levied on the profit realized upon realization (such as a sale). The proposed ‘Actual Return Act’ will be amended accordingly. A capital gains tax would already apply to immovable property from 2028. For other assets in Box 3 (such as crypto investments and other receivables and liabilities), the annual increase in value will be taxed in 2028 and 2029 (capital growth tax). From 2030, a capital gains tax will apply to all assets.  
• Reduction in the tax-free allowance for Box 3: Under the existing Box 3 system, the tax-free allowance will be reduced to € 30,846 per person from 2027 (2026: € 59,357). 
• Increase in the assumed rate of return on ‘other assets’ in Box 3: Under the current Box 3 system, the assumed rate of return for the ‘other assets’ category will be increased by 1.5 percentage points from 2027. This category covers all assets other than bank balances (such as shares, immovable property and receivables). The assumed rate of return is set annually on the basis of market data and is 6.0 per cent in 2026. 
• Reduction of the tax-free return under the future Box 3 regime: Under the future Box 3 system, a tax-free return of € 1,000 per person will apply as from 2028, instead of the previously proposed amount of € 1,800.