Tech companies warn against Box 3 tax: damage to the tech sector

Major Dutch tech companies such as Prosus and Booking.com are warning that the new plan for Box 3 taxation could have negative consequences for the tech sector in the Netherlands. They reported this in De Financiële Telegraaf. Tomorrow, the Senate will debate the proposed legislation that would allow the government to once again tax capital gains starting in 2028.

The government wants investors to pay a 36 percent tax in the future on the returns from their investments, such as stocks. This would apply even if those gains have not yet been sold or “realized.” According to the companies, this could have major consequences for employees in the tech sector.

Less international talent

Many tech companies pay their employees partly in stock. If those shares increase in value, employees must pay taxes on them each year. According to Prosus and Booking, this could make international talent less likely to choose the Netherlands. They believe that specialists are more likely to leave for other countries where the rules are more favorable.

Exception for startups: not enough

State Secretary Eelco Eerenberg has proposed an exception for startups, so that stock options are taxed less heavily there. But according to Prosus, that’s not enough. The company calls the plans a “band-aid on a bad law” and even refers to a “Frankenstein” system.

Earlier this year, a group of major tech companies had already expressed concerns about the plans for Box 3.

Senate

Meanwhile, the Senate is once again debating the reform of Box 3. The cabinet is still looking for a way to get the law passed, including through adjustments such as a possible “menu of options” for wealth tax. Opponents and supporters remain far apart on the consequences of the plan.