Executive Summary
On February 12, 2026, the Dutch House of Representatives passed the Wet werkelijk rendement box 3 (Actual Return in Box 3 Act), introducing a 36% tax on unrealized capital gains effective January 1, 2028. While startup exemptions exist, this legislation represents the latest chapter in a decades-long pattern of Dutch tax policy simultaneously incentivizing and penalizing innovation: creating structural disadvantages particularly harmful to capital-intensive deeptech ventures.
This analysis examines:
- The technical mechanics of Box 2 and Box 3 taxation systems
- How the unrealized gains tax specifically impacts deeptech funding dynamics
- Historical patterns of Dutch tax policy undermining startup ecosystems
- Quantitative evidence of the Netherlands' deeptech scaling failure
- Structural reforms necessary for competitive deeptech development
Key Finding: While the Netherlands offers world-class R&D tax credits (WBSO at 36-50%) and Innovation Box treatment (9% tax rate), these benefits are systematically undermined by capital formation barriers, particularly affecting deeptech companies requiring patient, long-term investment.
The Dutch Tax System: A Three-Box Framework
Understanding the unrealized gains tax requires understanding how the Netherlands categorizes and taxes different income streams.
Box 1: Work and Home
- Employment income and freelance earnings
- Primary residence imputed rental value
- Progressive rates: 36.97% to 49.50% (2026)
- Not directly relevant to investment capital
Box 2: Substantial Interest (Aanmerkelijk Belang)
- Applies when individual holds ≥5% ownership in a company
- Taxes realized income only:
- Dividends received: 26.9% (2026)
- Capital gains upon sale/liquidation: 26.9%
- No taxation on unrealized appreciation
- Critical protection for founders maintaining substantial stakes
Box 3: Savings and Investments
- Everything else: stocks, bonds, crypto, savings, real estate
- Previously: Fictitious return system (deemed 5-6% annual return regardless of actual)
- New system (2028): Two-track approach based on asset type
The 2028 Box 3 Reform: Dual Track System
Track 1: Capital Growth Tax (Vermogensaanwasbelasting)
- Assets: Publicly traded securities, bonds, crypto, Bitcoin
- Taxation: Annual mark-to-market on December 31st value change
- Rate: 36% flat
- Key point: Tax triggered whether or not you sell
Track 2: Capital Gains Tax (Vermogenswinstbelasting)
- Assets: Real estate, qualifying startup shares
- Taxation: Only upon realization (sale, gift, emigration, death)
- Rate: 36% on realized gains
- Annual income (dividends, rent) taxed yearly
Tax-free allowance: €1,800 annual return (replaces old €57,684 capital threshold)
This structure creates a critical bifurcation: liquid securities face annual taxation on paper gains, while illiquid assets (including startup shares meeting specific criteria) receive realized-gains treatment.
The Startup Exemption: Technical Specifications and Limitations
The legislation includes a carve-out designed to protect early-stage startup investment. Understanding its precise boundaries is critical.
Qualifying Startup Criteria
A company qualifies for capital gains treatment (Track 2, tax only on realization) if all of the following conditions are met:
- Age: Incorporated ≤5 years ago
- Revenue: Annual turnover <€30 million
- Independence: Not >25% owned by a non-startup business entity
- Structure: Must be a private limited company (BV) or equivalent
Shares in qualifying startups receive preferential treatment: investors pay 36% tax only upon actual sale, not on annual paper appreciation.
Who Benefits from the Exemption
Founders with >5% ownership:
- Automatically taxed under Box 2 (substantial interest regime)
- Never subject to Box 3 unrealized gains tax
- Pay 26.9% only on dividends and realized capital gains
- If startup reaches unicorn valuation while founder holds >5%: zero tax on paper appreciation
Angel investors and small shareholders:
- If shares qualify under startup criteria: Tax only on realization
- 36% rate applied when shares are actually sold
- Protection lasts as long as company meets all four criteria
The Exemption Cliff: Deemed Sale Trigger
The exemption creates a dangerous threshold effect. When a company ceases to qualify, by exceeding the 5-year age limit, crossing €30M revenue, or violating independence requirements, a deemed sale is triggered for tax purposes.
At that moment:
- Small shareholders (<5%) transition from Track 2 to Track 1
- A fictional "sale" occurs for tax calculation
- Going forward: Annual taxation on unrealized gains at 36%
Example scenario:
- Angel investor owns 2% of DeepTech AI (incorporated 2023)
- 2028: Company qualifies, shares under Track 2 (safe)
- 2029: Company reaches €35M revenue → exemption expires
- Tax authority treats shares as "sold" at 2029 fair market value
- 2030+: Investor owes 36% annually on paper appreciation, even if shares remain illiquid
This creates perverse incentives to exit before qualification cliffs rather than build for long-term scale.
The Historical Pattern: Death by a Thousand Tax Cuts
The unrealized gains tax is the latest manifestation of a systemic contradiction in Dutch innovation policy. The Netherlands simultaneously offers some of Europe's best R&D incentives and worst capital formation dynamics for high-risk ventures.
The Incentive Side: What Works
1. WBSO (R&D Tax Credit)
The Wet bevordering speur- en ontwikkelingswerk (Research and Development Promotion Act) is genuinely world-class:
Structure:
- Reduces wage tax liability for R&D employee hours
- Also covers certain material costs, tooling, and external testing
2025 Rates:
- First €380,000 in R&D labor costs: 36% tax credit
- Remaining R&D costs: 16% tax credit
- Technostarters (<5 years old): 50% on first €380,000
- Self-employed entrepreneurs: €15,738 fixed deduction
Qualification requirements:
- Development of technically new products, processes, or software
- Technical-scientific research (TWO)
- Work performed within EU
- Solving technical problems internally (not outsourced commodity work)
The WBSO effectively makes R&D labor 36-50% cheaper. For a deeptech startup burning €1M annually on engineering talent, that's €360,000-€500,000 in direct cost reduction, significant for early-stage capital efficiency.
2. Innovation Box
Companies with qualifying intellectual property can pay 9% tax on profits derived from innovation, compared to standard 19-25.8% corporate tax rates.
Requirements:
- Valid WBSO certificate for the R&D project
- Demonstrable R&D activities
- Profits attributable to self-developed IP
For a deeptech company generating €5M in annual profit from patented technology, Innovation Box saves approximately €550,000-€840,000 annually compared to standard corporate tax rates.
The Contradiction: What Destroys Capital Formation
Despite these R&D incentives, the Netherlands systematically undermines the capital side of the innovation equation:
Historical Tax Policy Failures:
1. Box 2 Debt Limitation (2023)
- Founders previously could borrow from their companies tax-free
- Common practice: Rather than take taxed dividends, founders would lend from company
- January 2023: New rule treats loans exceeding €700,000 as "fictional dividends" taxed in Box 2
- Impact: Reduced founder flexibility to manage personal finances without triggering tax events
2. Stock Option Taxation (Pre-2027 Reform)
- Historically: Stock options taxed at grant/vest as wage income in Box 1 (up to 49.50%)
- Problem: Employees owed tax on illiquid paper value
- Competitive disadvantage: UK, France, Germany offered capital gains treatment
- 2027 partial fix: Taxable base reduced to 65% for qualifying innovative startups
- Remaining issue: Still wage income treatment, not capital gains; 65% reduction helps but doesn't eliminate disadvantage
3. Wealth Tax (Box 3) on Entrepreneurial Capital
- Even before 2028 reform, Box 3 taxed investment portfolios at fictitious returns
- High-net-worth individuals faced annual wealth erosion regardless of actual performance
- Constitutional challenge in 2021: Supreme Court ruled system unconstitutional
- Government response: Not to eliminate wealth tax, but to "fix" it with mark-to-market system
4. Now: 36% Unrealized Gains Tax
- Most aggressive capital growth tax in developed world
- No comparable system in UK, Germany, France, Italy, Sweden, Denmark, Finland, Belgium
- Creates unique anti-competitive environment for patient capital
The Pattern: Each "fix" maintains or increases tax burden on entrepreneurial capital while international competitors move in opposite direction.
Deeptech's Unique Vulnerability: Why This Matters More Than SaaS
Deeptech companies (those building fundamental breakthroughs in materials, biotech, quantum, advanced hardware, energy, semiconductors) face capital requirements and timelines fundamentally different from software startups.
Deeptech vs. Software Economic
Key implication: Deeptech requires patient capital willing to wait 10-15 years for exits, accepting illiquidity, and funding through long development valleys.
The Dutch Deeptech Performance Gap
Quantitative evidence demonstrates the Netherlands' structural failure to scale deeptech ventures:
TechLeap State of Dutch Tech 2023 Findings:
Spinoff stagnation:
- 80% of Dutch spinoffs created remain active
- But: After 10 years, only 50% employ >10 people
- Translation: Companies survive but don't scale
Underfunded relative to European peers:
- Dutch deeptech raised only 1/3 of capital compared to Germany, France, Sweden
- Even lower compared to UK deeptech funding
- Not a quality problem, but a capital availability problem
IO+ State of Dutch Tech 2026 Analysis:
AI scaleup gap:
- Only 21.2% of Dutch AI startups scale up (raise >€10M after initial funding)
- European average: 31.1%
- US average: 80.9%
- 89% of Dutch AI startups build vertical solutions on US foundation models (lack of fundamental research commercialization)
Funding concentration:
- €2.64 billion deployed across 265 deals in 2025
- Number of deals down 14.5% vs 2024
- Capital flowing to fewer, later-stage companies
- Early-stage funding gap widening
Deeptech represents:
- 12% of all Dutch tech companies
- But 40% of scaleups (companies that successfully scale)
- Attracts 41% of all VC money in Netherlands
- Scaleup ratio: 39% (vs 17% for non-deeptech)
Paradox: Deeptech has higher scaleup success rates when funded, but faces lower funding availability, particularly at growth stages.
Why the Unrealized Gains Tax Exacerbates This
The 36% unrealized gains tax compounds existing deeptech capital constraints:
1. Discourages Patient High-Net-Worth Capital
Family offices and high-net-worth individuals represent critical growth-stage deeptech investors. They can:
- Write €1M-€10M checks
- Accept 10-15 year horizons
- Bridge between VC early-stage and institutional late-stage
Under the unrealized gains tax:
- If they invest in a deeptech company that doesn't qualify for startup exemption (e.g., >5 years old, university spinout with complex ownership)
- Or if the company "graduates" from exemption before exit
- They face annual 36% tax bills on paper appreciation of illiquid shares
Example:
- HNW investor deploys €5M into QuantumTech BV (year 6, post-exemption)
- Year 1: Company raises Series B at 2x valuation → investor's stake now "worth" €10M on paper
- Tax due: (€5M gain) × 36% = €1.8M cash tax on unrealized gain
- Problem: Shares are completely illiquid, no secondary market
- Investor must pay €1.8M from other sources or sell unrelated liquid assets
This is structurally guaranteed to reduce willingness to deploy capital into long-duration deeptech.
2. LP Taxation Kills VC Fund Economics
Dutch venture capital funds structured as commanditaire vennootschappen (CVs, limited partnerships) are "looked through" for tax purposes. The tax authority treats LPs as directly owning underlying portfolio assets.
Implications:
- If portfolio companies don't qualify for startup exemptions
- Or if they age out of exemption periods
- LPs face annual unrealized gains taxation on their fund positions
VC Fund Example:
- DeepTech Fund I raises €100M from Dutch family offices and institutions
- Fund invests in 10 deeptech companies, average hold period 10 years
- Years 1-5: Some companies qualify for exemption
- Years 6-10: Companies mature beyond 5-year threshold → deemed sale triggers
- LPs suddenly face annual tax bills on paper gains in illiquid fund positions
Traditional VC economics assume no distributions until exits. LPs expect to pay tax when fund realizes gains and distributes proceeds, not annually on paper valuations.
Annual unrealized gains taxation forces:
- Fund distributions to cover LP tax bills (reducing capital available for follow-on investments)
- Or LP exit from Dutch funds in favor of non-Dutch structures
- Or reduced LP commitments to Dutch deeptech funds altogether
3. The Exemption Cliff Accelerates Premature Exits
The 5-year age limit and €30M revenue threshold create artificial urgency completely disconnected from business fundamentals.
Real deeptech timeline:
- Year 1-3: R&D, prototype development, early validation
- Year 4-6: Pilot customers, regulatory approvals, manufacturing setup
- Year 7-10: Revenue growth, scaling production, market expansion
- Year 10-15: Profitability, market leadership, strategic exit or IPO
The 5-year startup exemption expires precisely when deeptech companies hit critical scaling inflection: when they need maximum capital, longest patience, and least pressure for premature liquidity.
Perverse incentive structure:
- Angels invested in years 1-2 face deemed sale tax event in years 6-7
- Those angels may demand earlier exits (years 5-6) to realize gains before cliff
- Or demand liquidation provisions, secondary sales, dividend policies, anything to access cash for tax bills
- Companies face pressure to stay under €30M revenue (avoid growth!) or exit quickly
This is anti-scaling by design.
International Context: How Competitors Are Pulling Ahead
While the Netherlands introduces one of the world's most aggressive unrealized gains taxes, competing European ecosystems are enhancing startup capital formation advantages.
UK: Capital Gains Treatment and EIS/SEIS
Enterprise Investment Scheme (EIS) and Seed EIS:
- Income tax relief up to 30-50% of investment amount
- Capital gains tax exemption on qualifying startup investments
- Loss relief if startup fails
Capital Gains Tax rates:
- 10% on first £1M lifetime gains (Business Asset Disposal Relief)
- 20% on additional gains
- vs. Dutch 36% on unrealized gains
Recent enhancements:
- Extended EIS qualifying criteria
- Increased investment limits
- Expanded sector eligibility for advanced tech
France: French Tech Visa and Tax Advantages
JEI (Jeune Entreprise Innovante) status:
- Corporate tax exemption for first profitable year
- 50% reduction for following year
- Social security contribution reductions
R&D Tax Credit (CIR):
- 30% credit on first €100M R&D spending
- 5% on additional spending
- Cash refundable for unprofitable startups
BSPCE (Stock options for growth companies):
- Favorable capital gains treatment (flat 30% tax, not wage income)
- No social contributions on stock option gains
- vs. Dutch 65% of wage income treatment post-2027 reform
Germany: Zukunftsfonds and Growth Financing
€10 billion Zukunftsfonds (Future Fund):
- Co-investment with private VCs in growth-stage companies
- Focus on deeptech, climate, digital infrastructure
- Explicit goal: Close Series B-C "valley of death"
Tax advantages:
- No wealth tax (eliminated 1997)
- Capital gains 60% tax-exempt for corporate investors in startups
- Simplified stock option taxation
The Competitive Disadvantage
A 2023 survey by the Dutch Association of Tax Advisors found zero of 12 comparable countries use a capital growth tax similar to the Netherlands' unrealized gains system.
The Netherlands is creating a unique anti-competitive environment precisely when competitors are enhancing advantages.
Capital is mobile. Deeptech companies can incorporate anywhere in the EU. Investors can deploy capital across borders.
The unrealized gains tax creates a structural incentive for:
- Dutch deeptech founders to incorporate in UK, Germany, or France
- Dutch angel investors to invest in non-Dutch startups
- International VCs to avoid Dutch fund structures
- Dutch LPs to commit capital to non-Dutch funds
Network effects in innovation ecosystems are self-reinforcing: Success attracts capital attracts talent attracts more startups attracts more success. The Netherlands risks triggering a negative network effect spiral.
The Liquidity Paradox: When Paper Gains Become Real Tax Bills
The government's own explanatory memorandum acknowledged "liquidity risk" as the reason for exempting real estate and qualifying startup shares from unrealized gains taxation. This admission is telling: it reveals awareness that taxing unrealized gains creates genuine liquidity crises.
But the exemptions are too narrow. They protect some players while leaving critical ecosystem participants exposed.
Who Faces the Liquidity Nightmare
1. Employees with Stock Options
Post-2027 reform improves stock option treatment (65% taxable base vs 100%), but employees still face Box 1 wage income taxation at grant/vest.
Scenario:
- Deeptech engineer receives options in year 2 (company qualifies for exemptions)
- Options vest in year 5
- Company raises Series C in year 6 at high valuation → employee exercises options, becomes small shareholder
- Year 7: Company crosses 5-year age threshold → deemed sale triggered
- Employee's shares valued at €200K on paper
- Shift from Track 2 to Track 1 taxation
- Year 8: Company raises Series D at 50% higher valuation
- Employee's stake now "worth" €300K
- Tax bill: €36K on €100K unrealized gain
- Shares remain completely illiquid (no secondary market, no buyer)
That employee must pay €36K in cash from their salary to cover tax on shares they cannot sell.
2. Technical Co-Founders Below 5% Threshold
Early employees who join pre-incorporation or as first hires may receive 2-4% equity stakes, just below the 5% Box 2 protection threshold.
They are the most risk-taking, earliest believers, often working below-market salaries for equity. Yet they face the harshest tax treatment:
- No Box 2 protection (hold <5%)
- Subject to Box 3 unrealized gains after startup exemption expires
- Annual tax bills on illiquid shares
- Cannot afford to maintain positions through growth phase
- Forced to sell early (if secondary market exists) or face annual tax bleeding
3. Academic Spinouts with University Ownership
Dutch universities often retain 10-30% ownership in spinout companies, creating complex ownership structures that may violate the "not >25% owned by non-startup business entity" independence requirement.
Even if the spinout qualifies initially, university ownership can create ambiguity about when exemption applies, adding administrative burden and risk.
4. Follow-On Investors in Maturing Companies
Growth-stage investors entering in Series B-C (years 5-7) may invest in companies that have already exceeded or are about to exceed the 5-year age limit.
These investors provide critical scale-up capital but receive no exemption protection:
- Invest €10M at year 6 valuation
- Company continues growing over years 7-10
- Investor faces annual 36% tax on paper appreciation throughout
- Even though the company remains private and illiquid
This explicitly discourages growth-stage investment in Dutch deeptech, the exact capital type TechLeap, TNO, and policy analysts identify as the primary constraint on scaling.
Constitutional and Political Realities: A Law Nobody Wants
Perhaps the most absurd aspect of this legislation is that even its supporters oppose it.
The Parliamentary Paradox
The bill passed the House of Representatives on February 12, 2026 with 93 votes, well above the 75 required majority.
Yet simultaneously:
- A parliamentary majority (including parties that voted yes) passed motions demanding the government present a realized-gains-only alternative by Budget Day 2028
- State Secretary Eugène Heijnen called the bill "an intermediate step"
- The January 2026 coalition agreement explicitly states intention to convert Box 3 to pure capital gains tax
Why pass a law everyone plans to repeal?
The Constitutional Constraint
December 2021: Dutch Supreme Court ruling
- Found the Box 3 "fictitious returns" system unconstitutional
- Government required to implement actual-return-based system by 2028
- Each year of delay costs treasury €2.3-2.4 billion
The government's dilemma:
- Constitutional mandate: Must tax actual returns
- Time constraint: Must implement by January 1, 2028
- Administrative capacity: Tax authority can only implement mark-to-market system within timeline
- Political reality: No consensus on better alternative
So they passed a law that:
- Tax advisors warn creates capital flight risk
- International experts condemn as internationally divergent
- The government itself plans to replace
- Creates perverse incentives for startups
All because the only constitutional solution the Belastingdienst (tax authority) could implement by deadline was a mark-to-market system.
The 2028 Replacement Window
There is a realistic possibility this law never fully takes effect:
- Implementation: January 1, 2028
- First tax year: 2028 (assessed on December 31, 2028 valuations)
- Tax filing: 2029 (for 2028 tax year)
- Budget Day 2028: Government must present realized-gains alternative
Timeline suggests:
- Law takes effect January 2028
- Throughout 2028, political pressure builds
- Government presents alternative in September 2028 Budget Day
- Legislative process in late 2028/early 2029
- Potential replacement before first major tax bills come due in 2029
This is policy via constitutional crisis, driven by court deadlines rather than economic rationale.
Structural Solutions: What Actually Needs to Change
Assuming the 2028 replacement occurs, what should it look like? And what broader reforms does Dutch deeptech need?
Short-Term: Box 3 Reform Principles
1. Pure Realized Gains Taxation
- Tax capital gains only upon actual sale
- Maintain 36% rate if necessary for revenue, but only on realized transactions
- Eliminates liquidity crisis entirely
2. Broaden Startup Exemptions
- Extend age limit from 5 years to 10 years (matches realistic deeptech timelines)
- Increase revenue threshold from €30M to €100M (allows genuine scaling)
- Simplify independence requirements (university ownership shouldn't disqualify)
3. Academic Spinout Carve-Out
- Create explicit exemption for university/research institute spinouts
- Recognize that public research commercialization is policy goal
- Don't penalize the exact university-to-market pathway government wants to encourage
4. Growth Investor Protection
- Any investor entering a company that received WBSO certification or Innovation Box qualification should receive realized-gains treatment
- Aligns tax incentives: If government subsidized the R&D, why tax the resulting investment gains unrealized?
5. Loss Symmetry
- Currently: Losses <€500 cannot be carried forward
- Reform: Full loss carry-forward with no threshold
- If government taxes unrealized gains in winning years, must allow offsetting unrealized losses
Medium-Term: Capital Formation Ecosystem
1. Dutch Growth Fund for Deeptech
- Create dedicated €2-5 billion fund for Series B-D stage deeptech
- Model on Germany's Zukunftsfonds
- Co-invest with private VCs at growth stages
- Explicit mandate: Bridge the 5-10 year "valley of death"
2. LP Tax Certainty
- Clarify that fund LPs in qualifying startup-focused VCs receive realized-gains treatment
- Prevent look-through taxation that creates unrealized gains bills for fund investors
- Make Dutch fund structures competitive with Luxembourg, UK, US alternatives
3. Stock Option Overhaul
- Move from wage income treatment to capital gains treatment (like France, UK)
- Tax at exercise-and-sale, not at vest/grant
- Eliminate or dramatically reduce social contributions on option gains
- Make Dutch startup equity competitive with international alternatives
4. Innovation Box Expansion
- Current 9% rate excellent, but qualification requirements too narrow
- Expand to cover more software/AI innovations (not just physical IP)
- Allow startups to "bank" Innovation Box eligibility for future profitable years
- Permit net operating loss (NOL) carry-forward to offset against Innovation Box income
5. Angel Investor Incentives
- Create Dutch equivalent of UK's EIS/SEIS
- Income tax relief for investments in qualifying startups (e.g., 30% of investment deductible)
- Capital gains tax exemption for startup investments held >3 years
- Loss relief: If startup fails, allow losses to offset other income
Long-Term: Ecosystem Structural Reforms
1. University Technology Transfer Reform
Dutch universities produce world-class research but underperform at commercialization.
Needed changes:
- Reduce university equity stakes in spinouts (from 10-30% to 0-10%)
- Allow founding teams to retain majority control
- Simplify IP licensing (shift from exclusive university ownership to founder-friendly terms)
- Benchmark against Stanford, MIT, Cambridge models
2. Corporate Venture and Acquisition Incentives
European companies (including Dutch firms like ASML, Philips, NXP) rarely acquire domestic startups compared to US dynamics.
Tax incentives for:
- Dutch corporates acquiring Dutch deeptech startups (reduced capital gains tax)
- Corporate venture arms investing in domestic innovation
- Acquihires and talent acquisitions (favorable treatment vs standard M&A)
3. Public Procurement as Innovation Demand
Government represents massive potential customer for deeptech solutions (defense, infrastructure, healthcare, energy).
Policy levers:
- Set-aside percentages for startup suppliers (e.g., 5% of procurement budget)
- Pre-commercial procurement programs (pay for R&D leading to products)
- Fast-track approval processes for innovative solutions
- Accept higher unit costs for early-stage technology (value innovation premium)
4. Talent Pipeline Development
The Netherlands ranks 22nd of 25 countries for international employee participation schemes, a talent competitiveness problem.
Reforms:
- Expand 30% ruling (tax-free allowance for foreign workers) specifically for deeptech roles
- Simplify visa/work permit processes for technical talent
- Create direct PhD-to-startup pathways (reduce bureaucracy)
- Student loan forgiveness for graduates joining deeptech startups
5. Patient Capital Cultural Shift
Dutch investment culture skews conservative: favoring real estate, bonds, established companies over high-risk/high-reward ventures.
Requires:
- Public education campaigns on deeptech opportunity
- Showcase successful Dutch exits (Adyen, Booking.com as role models)
- LP commitments from pension funds (ABP, PFZW) to domestic VC
- Government fund-of-funds investing in Dutch deeptech VCs
Deeptech Founder Playbook: Navigating the 2026-2028 Window
For founders building deeptech companies in the Netherlands today, what should you actually do?
Immediate Actions (2026-2027)
1. Understand Your Exemption Status
Run the checklist:
- Company age: ≤5 years from incorporation?
- Revenue: <€30M annually?
- Ownership: Not >25% owned by non-startup entity?
- Structure: Dutch BV or equivalent?
If all four yes: Your angel investors and small shareholders benefit from capital gains treatment (Track 2).
If any no: Some investors may face unrealized gains taxation under current law.
2. Cap Table Tax Optimization
Founder stakes:
- If you hold ≥5%: You're in Box 2 (substantial interest) → protected from Box 3 unrealized gains tax
- Consider vesting schedules and exercise timing to maintain >5% as long as possible
- Co-founders: Aim for each co-founder to maintain >5% individually (better than 3 co-founders at 4-4-4%)
Employee equity:
- Communicate tax implications clearly when granting options
- Consider longer vesting schedules (4-5 years) that align with startup exemption period
- Explore RSUs vs options (different tax timing)
3. Investor Due Diligence
Before closing funding rounds:
- Confirm whether your company qualifies for startup exemptions
- Disclose to investors: Are they getting Track 2 (capital gains) or Track 1 (unrealized gains) treatment?
- For investors entering after year 5 or when revenue >€30M: Explicitly discuss tax implications
- Document exemption status in investment agreements
4. Track Exemption Cliffs
Build monitoring system:
- Calendar alert for 5-year incorporation anniversary
- Monthly revenue tracking against €30M threshold
- Ownership structure reviews (ensure no >25% non-startup owner)
As you approach cliffs:
- Communicate with existing investors (deemed sale trigger coming)
- Consider secondary liquidity options before cliff
- Evaluate whether to slow revenue growth (controversial but rational under perverse incentives)
Strategic Planning (2027-2028)
1. Exit Strategy Reevaluation
Traditional deeptech timeline:
- 10-15 years to exit
- Maximize scale before M&A or IPO
Unrealized gains tax timeline:
- Investor pressure for liquidity may accelerate around year 6-7 (post-exemption)
- Board discussions should address: Are we building for optimal outcome or optimal tax treatment?
Options to consider:
- Earlier strategic acquisitions (years 6-8 vs 10-12)
- Dividend policies to provide cash for investor tax bills
- Secondary share sales before exemption cliff
- IPO timing relative to exemption expiration
2. Jurisdictional Strategy
Controversial but pragmatic question: Should you incorporate outside the Netherlands?
Factors favoring Dutch incorporation:
- WBSO R&D tax credits (36-50% labor cost reduction)
- Innovation Box (9% tax on IP profits)
- Mature startup ecosystem, talent access
- EU market access
Factors favoring alternatives (UK, Germany, France):
- No unrealized gains taxation of investors
- Better stock option treatment (UK, France)
- Larger growth capital pools
- Better international scaling examples
Hybrid approach:
- Dutch operating company (capture WBSO, Innovation Box)
- Foreign holding company structure
- Consult specialized tax advisors on legal structures
3. Investor Relations Strategy
Proactive communication:
- Annual updates on exemption status
- Explain tax implications of company milestones
- Provide valuation guidance for tax reporting
- Offer intros to tax advisors specializing in startup investments
Consider investor type:
- Dutch HNW individuals: Most exposed to Box 3 issues
- International VCs: May face different tax treatment in home jurisdiction
- Dutch VCs with non-Dutch LPs: Lower exposure
- Corporate VCs: Different tax dynamics
4. Advocacy Participation
The 2028 replacement is not guaranteed without continued pressure.
Get involved:
- Join Techleap, VNO-NCW, or industry association advocacy efforts
- Share your story: How does this law impact your fundraising?
- Connect with other founders facing similar challenges
- Engage with policymakers (Second Chamber members, State Secretary)
Your voice matters: Real company examples are more persuasive than theoretical policy arguments.
Contingency Planning (2028+)
Scenario 1: Law Proceeds Unchanged
If unrealized gains tax takes effect without modification:
- Expect reduced capital availability from Dutch HNW individuals
- Anticipate earlier exit pressure from investors approaching/past exemption cliffs
- Consider secondary markets or partial liquidity events
- Factor investor tax bills into capital raising strategy (may need larger rounds to cover)
Scenario 2: Law Replaced with Realized Gains System
If government delivers on 2028 reform promise:
- Capital constraints ease (primary goal achieved)
- Resume normal long-term deeptech building strategy
- Continue leveraging WBSO and Innovation Box advantages
Scenario 3: Partial Reform
Most likely outcome: Revised exemptions, extended timelines, but some version of capital growth tax remains
- Adapt to final rules (exemption criteria, thresholds, rates)
- Optimize structure within new framework
- Maintain flexibility to adjust as policy evolves
The Broader European Context: Deeptech's Strategic Importance
This is about Europe's technological sovereignty.
Why Deeptech Matters Geographically
The US dominates digital platforms and AI foundation models:
- Google, Meta, Amazon, Microsoft, OpenAI, Anthropic
- 7 of 10 largest tech companies globally are American
- US venture capital: ~$238B (2023) vs Europe: ~€50B
China leads in manufacturing, hardware, batteries, solar:
- BYD, CATL, Huawei, Xiaomi
- 60-80% of global solar panel production
- 70%+ of global battery production
- Advanced manufacturing at scale
Europe's competitive advantage must be in deeptech:
- Advanced materials (composites, semiconductors)
- Precision manufacturing (ASML, Carl Zeiss)
- Cleantech and energy transition
- Biotech and life sciences
- Quantum and advanced computing
The Netherlands specifically has world-class positions in:
- Semiconductor equipment (ASML photolithography)
- Agricultural technology (Wageningen ecosystem)
- Quantum computing (QuTech Delft)
- Offshore wind and maritime technology
- Photonics and integrated optics
These advantages require patient, long-term capital to maintain.
The Geopolitical Stakes
European Commission President Ursula von der Leyen's 2024-2029 agenda explicitly prioritizes:
- Technological sovereignty
- Deep tech innovation
- Reducing dependence on US digital platforms and Chinese manufacturing
Yet member states like the Netherlands actively undermine these goals with capital-hostile tax policies.
If Europe cannot fund its own deeptech champions:
- US investors will own European IP
- Chinese manufacturers will out-compete European production
- Strategic dependencies on foreign technology will increase
- Economic and security vulnerabilities will grow
The unrealized gains tax is a small policy in a large context but it moves in precisely the wrong direction.
Conclusion: A Test of National Priorities
The Netherlands stands at a crossroads.
On one side: A future as a leading European innovation hub, where deeptech companies commercialize world-class research, where patient capital funds breakthroughs, where technical talent builds the next generation of advanced technologies.
On the other: A future as a cautionary tale, where talented founders incorporate in London or Berlin, where Dutch capital deploys in foreign startups, where universities produce excellent research that gets commercialized elsewhere.
The unrealized gains tax tips the balance toward the latter.
This legislation reveals a fundamental misalignment in Dutch innovation policy. The government simultaneously:
✅ Subsidizes R&D labor at 36-50% (WBSO)
✅ Taxes innovation profits at 9% (Innovation Box)
❌ Taxes unrealized investment gains at 36% annually
❌ Creates artificial exemption cliffs that discourage scaling
❌ Adopts internationally divergent policies that drive capital elsewhere
You cannot build a thriving deeptech ecosystem while systematically punishing the capital that funds it.
What Needs to Happen
For policymakers:
- Deliver on the 2028 replacement commitment with pure realized-gains taxation
- Extend startup exemptions to 10 years and €100M revenue
- Create growth-stage capital programs (Dutch Zukunftsfonds equivalent)
- Reform stock option taxation to capital gains treatment
- Simplify university technology transfer
For founders:
- Understand your exemption status and tax implications
- Plan strategically around exemption cliffs
- Communicate proactively with investors
- Participate in advocacy efforts
- Build for long-term value despite short-term policy headwinds
For investors:
- Demand clarity on tax treatment before deploying capital
- Support policy advocacy for startup-friendly reforms
- Consider fund structures that protect LPs from unrealized gains exposure
- Maintain patient capital commitments despite policy uncertainty
For the ecosystem:
- Amplify the message: This law threatens Dutch competitiveness
- Share real company stories demonstrating impact
- Benchmark internationally: Show what competitors are doing
- Build coalition across founders, investors, universities, corporates
The Window Is Narrow
The 2028 Budget Day replacement represents a genuine opportunity to fix this policy before it causes lasting damage. But that only happens with sustained pressure.
Deeptech companies are fundamentally different from software startups. They require:
- Longer timelines (10-15 years vs 5-7 years)
- More capital (€50M-€200M vs €10M-€30M)
- Patient investors accepting illiquidity
- Risk tolerance for technical failure
A tax system that punishes paper gains on illiquid, long-duration investments is structurally incompatible with deeptech development.
The Netherlands has the research base, the talent, the infrastructure, and the R&D incentives to be a European deeptech leader. Don't let a misguided wealth tax implementation destroy what decades of smart policy built.
The choice is clear. The time is now. The stakes couldn't be higher.
Build the future. Fix the tax code. Choose innovation.
