New lucrative interest legislation to be proposed

The State Secretary of Finance has indicated that the 2026 Tax Plan may include a legislative proposal to prevent lucrative interest taxation being mitigated by contributing such lucrative interest to a company (for instance NV or BV).

This proposal is a direct response to a motion submitted which requested to close this so-called substantial interest route (‘box 2 structure’). In this box 2 structure the holder of the lucrative interest contributes this interest to a(n) (often newly incorporated) BV when obtaining the lucrative interest or shortly thereafter, to avoid progressive taxation in Box 1 with respect to the lucrative interest and to benefit from the (lower) Box 2 tax rate in respect of the lucrative interest.

The State Secretary seems to intend to counter this box 2 structure by introduction of a so-called ‘multiplier’, which multiplier would be applied to the Box 2 tax base. Such multiplier would effectively increase the amount of taxable income (tax base) in Box 2 by a multiple percentage yet to be determined. Such increased Box 2 tax base would mean more tax becoming due on the actual benefit received in Box 2 and reduce the tax charge difference in comparison to the Box 1 progressive taxation in respect of lucrative interests. 

It is not yet known when the State Secretary will present his proposal, whether there will be transitional law and/or retroactive effect. Taxperience will of course continue to monitor these developments closely. If you have any further questions about this subject, please do not hesitate to contact us. We will be happy to provide you with further information.