New rules for employee stock options
In its 2025 Spring Memorandum, the Dutch Government proposed a new tax scheme to promote the granting of stock options at innovative start-ups and scale-ups.
In times of staff shortages, it can be difficult for start-ups and scale-ups to compete with established companies in terms of salary. A tight labour market can be particularly challenging when highly educated and experienced employees are needed to further professionalize the start-up/scale-up. In order to attract the desired employees, a company may consider making its staff co-owners of the company. There are various types and forms of employee participation plans. In this article, we focus on employee participation through employee options, and in particular on the announced change to make the granting of these options more attractive.
From 1 January 2027, two measures will be proposed to promote the remuneration of employees through share options for innovative start-ups and scale-ups.
The aim is to promote this by reducing the effective tax burden on the benefit achieved (from 49.5% to 32.2%). The effective tax burden on the result achieved will be lower because “only” 65% of the proceeds will be included in the tax assessment. As a result, employees will pay less tax on their benefits from share options than on their regular wages. In addition, the timing of taxation will change. Taxation will only take place at the time of sale of the shares. Employees will retain the option to pay tax at an earlier stage (e.g. when exercising the option right).
Only companies that qualify as start-ups or scale-ups are eligible for the new scheme. To qualify, a decision must be obtained from the Netherlands Enterprise Agency (in Dutch: Rijksdienst voor Ondernemend Nederland (‘RVO’)). The RVO will play an important role in assessing whether a company qualifies. The contours of a new definition of a start-up/scale-up take into account the atypical aspects of this type of company. Instead of assessing the length of existence and annual turnover, the company is assessed on innovation, scalability and liquidity.
In the new definition, a company is considered a start-up or scale-up if the following four cumulative conditions are met:
1) The company is innovative and has scalable business activities.
2) The company can demonstrate the steps necessary to realise these scalable activities and growth by means of a growth plan.
3) The company is operated as a Dutch private limited company, public limited company or a comparable European legal form.
4) The company is not in suspension of payments or bankruptcy and has adequate solvency and liquidity for an innovative company with scalable business activities.
For companies that do not qualify as start-ups or scale-ups, the current regulations continue to apply.
If you are interested in implementing an employee participation plan within your company, our advisors will be happy to assist you.