The Minister of Economic Affairs, Dirk Bejaarts, has recently published a study about the tax rules for employee participation schemes for start-ups and scale-ups. This study emphasised the importance of these companies to the Dutch economy and the challenges they face in attracting and retaining talent.
One of the main findings of the study concerns the role of employee participation, particularly in the form of share options. These share options offer employees the opportunity also to profit from the growth of the company which then motivates them to remain longer with the company. This is particularly important for start-ups and scale-ups who often do not have the means to be able to offer competitive salaries.
The study points out, however, that the benefits from share options are relatively heavily taxed in the Netherlands, as shown by an earlier study by EY. This makes the Netherlands less attractive on the international employment market to skilled labour in the start-up segment.
A recent comparative international study now confirms these findings. The Netherlands turns out to have one of the least attractive tax regimes for share options in start-ups and scale-ups. A hypothetical case showed that the nett remuneration of an employee in the Netherlands is considerably less than in other countries, and the risk relative to the reward is almost three times as much.
The Bouwstenenrapport (Building Blocks Report), a drive towards a simpler tax system, provides a possible outline for a new scheme. The government is currently investigating changes to the tax legislation to create a competitive, fair and internationally-attractive tax climate for people working in start-ups and scale-ups. The House will be informed of the further development of these proposals before 1 July 2025.