The influence of a center cabinet on the Dutch business climate
05/02/26
This article is based on the information that was available on 4 February 2026.
A new government has been formed: D66, CDA and VVD now form a minority cabinet. An important topic for the new cabinet is the business climate. The investment (or business) climate contributes directly to economic growth, employment, and innovation in the Netherlands.
In this article, we explore tax measures that significantly affect the business sector, providing insights into their impact on the business climate. We discuss the programmes of D66, CDA and VVD, as well as their Coalition agreement.
Business climate
The business climate in the Netherlands encompasses the conditions and factors that companies encounter when establishing, developing, and expanding their operations. Our report, Business Climate Heatmap 2025: Measuring Dutch Business Climate Trends, compiles 65 indicators that influence this environment, including human capital, infrastructure, the macroeconomic landscape, safety, governance, and trade.
The business climate is crucial for Dutch society because it directly contributes to economic growth, employment, and innovation. An attractive business climate encourages companies to invest, establish themselves, and expand in the Netherlands, leading to more jobs, higher productivity, and stronger economic earning power. A sound business climate is also necessary to invest in labour productivity growth: the key to sustainable economic progress in an ageing society.
Moreover, the business climate determines the extent to which the Netherlands can compete with other countries to attract talent, capital, and innovation. A robust business climate not only benefits the business sector but also enhances the overall prosperity and future outlook for all Dutch citizens.
Yet, the latest Business Climate Heatmap reveals a decline in the Dutch business environment over the past three years, matching the low scores of the pandemic year 2020. This downturn is primarily due to a negative political sentiment towards business and significant economic policy uncertainty. However, the recent election results offer a promising foundation for consistent long-term policy, presenting a key opportunity to revitalise the business climate.
Government formation
Several options for forming a cabinet have been explored. Eventually D66, CDA and VVD decided to form a minority cabinet and have struck a Coalition agreement. This agreement contains a number of concrete tax measures as well as several intentions for tax measures that still need to be (further) developed. The focus is explicitly on strengthening the Netherlands’ economic earning power. It is also clearly stated that the coalition wants to provide businesses with certainty by maintaining a number of important tax regimes. This contributes to stable government policy. There is also an emphasis on sustainability and innovation, with attention to a level playing field within Europe. The coalition wants to simplify regulations and reduce administrative burdens, although the plans for reforming the tax and benefits system are still quite high-level. The mortgage interest deduction remains intact, despite strong arguments for abolishing it. The “box 3” system (taxation of savings and investments) will eventually be changed to a tax on capital gains and realised returns. An adapted proposal will be submitted for the tax treatment of self-employed workers. The sharply increased defense expenditures will be financed by introducing a so-called “freedom contribution” from citizens and businesses.
A complete overview of the intended tax measures can be found in our article ‘Coalition agreement 2026: the tax measures at a glance’.
Since these three parties will form a minority cabinet (66 seats in the House of Representatives), they will need to seek support from other parties for individual proposals. This implies that the plans from the agreement can still be adapted to secure sufficient backing. Nevertheless, the coalition agreement is an important indication of the coalition’s direction and the future cabinet.
The coalition agreement and the accompanying budget table show that, for the time being, no major changes are expected to the business climate. Choices in financing are based on prudent fiscal policy, spending cuts, and a substantial freedom contribution. In our opinion, it is a missed opportunity that there apparently was no room to abolish inefficient tax regimes that have been negatively evaluated. This could potentially prevent an increase in the burden through the freedom contribution and might even create space for the much-needed reduction in the tax burden on labour.
Wennink Report
On 12 December 2025, Peter Wennink presented his report, ‘De route naar toekomstige welvaart’ (The Road to Future Prosperity). Wennink emphasizes that it is essential to focus on domains where the Netherlands can build and maintain a strategic position. The domains he wants to prioritise are:
Digitalisation & AI;
Security & Resilience;
Energy & Climate Technology;
Life Sciences & Biotechnology.
The Wennink report states that to maintain the current level of prosperity, the Netherlands needs economic growth of at least 1.5 to 2.0 percent. This can be achieved by increasing the labour supply and/or productivity. The report notes that boosting productivity requires a focus on innovation, which in turn demands investment.
Tax policy is a crucial precondition, as highlighted throughout the report for every investment proposition. This primarily concerns fiscal incentives for (R&D) investments and lowering electricity prices to competitive levels. Wennink argues that the WBSO and the innovation box should be maintained, and that the investment deduction scheme should be broadened. The report also repeats a frequently heard call: inefficient fiscal arrangements should be phased out and abolished.
According to the report—and in our view, rightly so—policy stability goes hand in hand with stable, stimulating fiscal policy. The report further suggests that the Dutch tax system should be better aligned with those of competing EU member states. Furthermore, the Netherlands should refrain from imposing national taxes on top of EU rates, such as a national CO2 tax, as this creates an uneven playing field within Europe.
We also see these fiscal topics reflected, to varying degrees, in the coalition agreement and the election programs of the aforementioned parties.
Further reading?
In our Dutch publication of this article, you will also find the key tax measures from the ‘positive agenda’ and the individual, relevant parties that directly affect the business climate, explained in more detail. Furthermore, a so-called Coalitionradar has been added to get further detail on eight themes relevant for the business climate. We have also included the points ultimately prioritised in the Coalition Agreement, as well as those highlighted in the Wennink report. This allows readers to see how party programmes have evolved into the Coalition Agreement. In addition, the publication indicates the budgetary impact wherever possible, so it is clear how significant certain measures are.
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