Spring Memorandum

The Spring Memorandum was published on Friday 18 April. It contains an update of the budget for 2025 and the years immediately thereafter. The definitive budget for 2026 will be presented on Budget Day.  

We would like to report on the new tax scheme which is to be introduced for employee participation schemes (share options) in start-ups and scale-ups, as well as some interesting plans that were either included in the Spring Memorandum or announced a little later. 

Employee participation schemes for start-ups and scale-ups

A new tax scheme is to be introduced to encourage employee participation among start-ups and scale-ups. The scheme reduces the payroll and income tax for employees of these types of companies by narrowing the tax base for income from share options to 65%. This will result in an effective tax rate of about 32%. A percentage comparable with the rate in box 2. This rate is more in line with what is applied in similar countries elsewhere. 

Further, the tax levy moment will be delayed until the time of the actual sale of the shares, although it will still be possible to bring the tax moment forward. This provides employees with some degree of flexibility. 

The definition of what qualifies as a start-up or scale-up (innovative or not) will be announced later. 

This scheme will be introduced for share options only and not for any other type of share plan. It is envisaged that the new rules will enter into force on 1 January 2027. 

Other plans included in the Spring Memorandum

• Invalidity Insurance Fund (AOF) contribution: the low AOF contribution will be reduced by 0.21% in 2026 and 0.23% in 2027. Conversely, the high Invalidity Insurance Fund (AOF) contribution will be increased: by 0.03% in 2026 and 0.4% in 2027.
• Postponement of pension lump sum: The introduction of the pension lump sum amending legislation has again been delayed. Pension providers have indicated that they will need at least six to nine months, after approval has been given by both Chambers, to properly inform participants about the right of option to withdraw a lump sum from their retirement pension. This is why the introduction has been postponed until 1 July 2026.
• Early retirement (RVU) exemption: This new Memorandum increases the exemption threshold for the early retirement levy from 2026 and extends it for three years. In addition, funds have been earmarked for a possible extension of the exemption threshold thereafter. This will be covered partly by a stepped increase in the rate of the early retirement scheme (RVU) levy to 65% in 2028 and, for the rest, through an increase in the Invalidity Insurance Fund (AOF) contribution.
• Widening/clarification of bicycle scheme: At the moment there is taxable benefit in kind on providing an electric or standard bike. This benefit in kind applies only to bikes that are also used for private purposes. A bicycle used for commuting is considered to have been made available also for private use. This causes problems for bikes that are used for commuting but which, as a rule, are not taken home, such as hub bikes. This measure is intended to clarify the bicycle scheme to deal with the problem of this unintended effect. The measure ensures that no taxable benefit in kind accrues to "business" bikes that are not generally kept at home. 
• Income tax bands: The table correction factor in income tax will be applied at 46.2% instead of 51% (from 1 January 2026). This means that the tax bands and tax credits in income tax will provide less compensation for higher inflation. 

Final levy on fossil-fuel company cars

The Cabinet approved the climate package on Friday 25 April. A specific measure for cars forms part of it with an entirely new pseudo-final levy on the employer for fossil-fuel company cars. 

It has been proposed that from 2027 new company cars with combustion engines will be subject to a final levy in wage tax payable by the employer. This is to be introduced alongside the normal payroll tax payable by the employee for private use of his or her company car (the taxable benefit in kind). Emission-free vehicles (EV or battery-hydro) will be exempt from this levy.

This will only affect new cars, or those with a first vehicle registration date from 1 January 2027. The final levy will apply to both passenger cars and delivery vans where there is private use. The self-employed working in a sole proprietorship will also be exempt because they do not pay wage tax (only income tax).

The rate for the final levy will be 52% of the taxable benefit in kind percentage of the list price. For a car of €50,000 with a taxable benefit in kind of 22% this will then amount to 0.52 * (0.22 * 50,000) = €5,720. 

These plans have to be further fleshed out and will be presented in the Tax Plan 2026 submitted on Budget Day 2025.