Increased tax base lucrative interest taxation
16/09/25
In the 2026 Tax Plan, the government has proposed amendments to the lucrative interest regime. Private equity managers and investors in participation schemes with a so-called lucrative interest investment will pay more income tax on their returns. From 1 January 2026, the box 2 tax base for indirectly held lucrative interest income will be increased by applying a multiplier. This measure is intended to bring the tax burden on indirect held lucrative interest more closely in line with the tax rate in box 3 (36%).
Background: what is the lucrative interest regime?
The lucrative interest regime has been in place since 2009 and is intended to tax the returns that managers (including directors and employees) can potentially achieve on their investment in a leveraged structure that is considered part of their remuneration package. These lucrative interest investments are deemed to constitute remuneration for the services performed by these managers. As a result, income from a lucrative interest has a hybrid character: on the one hand it is a capital gain, and on the other it is linked to compensation for services rendered. This arises mainly in private equity funds and other management equity investments, where managers are allowed to invest in a share that can yield a relatively high return compared to their invested capital. The lucrative interest regime can apply to regular management investment plans.
In principle, benefits from lucrative interest are taxed in box 1 as income from other activities (at progressive rates up to 49.5%). However, current law provides a specific option to tax these benefits in box 2 (aanmerkelijk belang, substantial interest), subject to conditions, at a maximum rate of 31% in 2025. This is the substantial-interest variant of the lucrative interest.
The conditions to qualify for this substantial-interest variant are:
- The manager must hold the lucrative interest indirectly through a holding company in which the manager holds a substantial interest (box 2)
- A pass-through requirement applies: at least 95% of the benefits from the lucrative interest must be distributed to the manager personally in the same year. If this condition is met, the benefit is not taxed in box 1 but entirely in box 2 as dividend/substantial-interest income. If no pass-through takes place, the income falls under box 1.
In recent years, there has been growing political attention to the nominal difference in income tax rates: 31% in box 2 versus 49.5% in box 1. Considering the hybrid nature of the lucrative interest, there have been calls to increase the tax burden on lucrative interest.
Adjustment: higher box 2 tax via multiplier
The current system will remain in place: benefits from a lucrative interest will in principle continue to be taxed in box 1 (at a maximum of 49.5%) and, subject to the abovementioned conditions, may still be taxed in box 2 instead of box 1. However, as of 2026 a multiplier will be applied to box 2 income from an indirectly held lucrative interest. The existing regime will remain, but the effective burden in box 2 will be increased. In these cases, the tax base will be increased by applying a multiplier of 36/31. Effectively this means that from 2026 the effective tax rate for an indirectly held lucrative investment will be increased from 24.5% to 28.45% for the first box 2 income threshold and increased from 31% to 36% for the remaining income in box 2.
Example: For a benefit from a lucrative interest of EUR 100,000, not EUR 100,000 but EUR 116,129 (i.e., multiplied by 36 and divided by 31) will be taxed at the box 2 rate (currently 24.5% on the first EUR 67,804 and 31% on the remainder).This measure will take effect on 1 January 2026, with no transitional regime. The explanatory notes indicate that no exception will be made for existing funds or interests. Accordingly, all distributions from 2026 that fall under the regime will be taxed at the higher effective rate, regardless of when the interest was granted. The proposed changes will not affect existing rulings concluded with the Dutch tax authorities.
What does this mean for you / your business / your organisation?
For those involved in the private equity sector, particularly fund managers and participating investors, the amendment to the lucrative interest regime from 2026 could have the following practical implications and points to note:
- Higher tax burden on your return:
The net proceeds from a lucrative interest will decrease, because upon realisation you will have to remit additional tax on this benefit.
- Where possible, review your timing:
Benefits you still realise in 2025 fall under the current maximum box 2 rate of 31 %. By completing a sale or dividend distribution of your investment position within this year, you can benefit from the lower rate and avoid the additional charge under the new measure. Such decisions must, of course, align with commercial reality and the agreements with co-investors.
- Consider alternative forms of remuneration:
For new or existing participation plans or bonus structures, it is advisable to explore alternatives that fall outside the lucrative interest regime. Besides co-investments, a commonly cited alternative is Stock Appreciation Rights (SARs) or other types of cash or share-based bonuses. The advantage of SARs is that, although the appreciation in the value of the underlying shares may be taxed as income for the recipient at progressive rates up to 49.5 %, such payments are generally deductible for corporate income tax purposes for the employer or company. This contrasts with a lucrative interest, where the costs are not deductible. In addition, no investment is needed by the participant. On balance, an alternative structure may therefore prove more efficient. This will need to be assessed on an individual basis.
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