Dutch Startup Share Options in 2027: Tax Reform, SARs and Investor Implications

The proposed Dutch tax regime could make employee share options considerably more attractive, but foreign investors should still treat employee equity as a cap table, governance and transaction issue.

The Netherlands is taking a significant step towards making employee share options more competitive for startups and scale-ups. On 15 September 2026, the Dutch government submitted the Wet fiscale stimulering start-ups en scale-ups to Parliament. The proposal is intended to apply from 1 January 2027.

For qualifying companies, the proposal would generally defer taxation until the employee actually sells the shares acquired through the options. In addition, only 65% of the relevant option benefit would be included in the wage-tax base. The employee can, subject to the statutory requirements, elect for an earlier taxable moment.

For international investors, founders and deal counsel, however, the development is broader than a Dutch tax change. If the regime enters into force, actual share options may become a more credible part of Dutch startup compensation. That makes the legal structure behind the option pool increasingly relevant in financing rounds, due diligence and exits.

It does not make every form of Dutch “employee equity” equivalent. Options, STAK depositary receipts, direct shares, Stock Appreciation Rights (SARs) and phantom equity remain legally different instruments with different implications for dilution, governance and transaction execution. For a broader overview of these structures, see Employee Participation Plans in Dutch Startups and Scale-ups.

The proposed 2027 option regime

The proposal is specifically aimed at employee share options in qualifying startups and scale-ups.

Under the current Dutch regime, taxation can arise when the shares obtained through exercise of the options become tradable. The proposed regime would in principle move that taxable moment further forward, to the actual disposal of those shares.

The taxable base would also be reduced. Only 65% of the relevant benefit would be treated as taxable employment income. The policy objective is to allow Dutch startups and scale-ups to compete more effectively for talent without creating a tax liability before the employee has actually obtained liquidity.

The regime is not automatic. The company must satisfy the statutory startup or scale-up criteria and obtain the required RVO determination. The legislation also contains specific conditions and administrative requirements. Transitional rules may allow qualifying options granted on or after 17 April 2025 to fall within the new regime if the statutory requirements are met.

The proposal is also still legislation in progress. The Dutch Council of State has raised material questions about, among other things, effectiveness, implementation and the state-aid position. Parliamentary approval is still required.

For transaction teams, the correct approach is therefore not to assume that “Dutch startup options become tax-efficient in 2027”. The company, the plan and the individual grants will need to qualify.

Why this matters for foreign VC investors

Employee equity is often presented in a VC term sheet as a percentage: a 10% option pool, a 15% pool or a pool to be topped up before closing.

That percentage only tells part of the story. In a Dutch BV, investors should establish what the pool actually consists of. Employees may hold genuine options over shares, options over STAK depositary receipts, direct shares, contractual SARs or phantom rights. These instruments do not create the same legal position.

An investor reviewing a Dutch startup should therefore look at both the fully diluted economics and the legal implementation. Pool size affects founder dilution and valuation. The underlying instrument affects governance, corporate approvals, notarial implementation and exit mechanics.

This is why employee participation should form part of the wider Dutch financing workstream rather than being treated merely as an HR arrangement. The same point is relevant when reviewing Option Pools in Dutch Startup Financings: the commercial percentage, the fully diluted cap table and the Dutch corporate implementation need to tell the same story.

For foreign investors unfamiliar with the wider Dutch structure, I discuss the legal mechanics in more detail in Share Options for Dutch Startups and Scale-Ups.

Share options and SARs are not the same instrument

The renewed attention for employee equity also puts SARs back into focus.

A Stock Appreciation Right generally gives the participant a contractual claim linked to the increase in value of the company. The participant does not acquire the underlying shares merely by receiving the SAR.

That has an obvious governance advantage. A company can provide employees or management with economic upside without adding them as shareholders, giving them voting rights or requiring a share issue for every participant.

But SARs create a different economic obligation. At an exit, a SAR plan may generate a potentially material cash payment. The plan therefore needs to determine how value is calculated, whether preference shares and liquidation preferences affect that calculation, how debt and transaction costs are treated, what happens to unvested rights and when payment becomes due.

For an investor or buyer, that payment obligation can be just as relevant as dilution under an option plan. The proposed 2027 facility is drafted around employee share option rights and the shares acquired through exercise. A cash-settled SAR should therefore not simply be treated as another name for an option falling within the new regime. Its tax treatment needs to be assessed separately with specialist tax advisers.

For more on the legal structure and transaction implications, see Stock Appreciation Rights in Dutch Companies.

The Dutch BV mechanics still matter

A more attractive tax regime does not turn a Dutch BV option plan into a Delaware option plan. An option grant does not by itself make an employee a shareholder. If the employee ultimately receives new shares in a Dutch BV, the necessary corporate approvals and Dutch notarial steps still have to be completed.

The option documentation must therefore work together with the company’s broader document architecture. Depending on the structure, this may include the option plan, individual grant documentation, shareholders’ agreement, articles of association, shareholder and board resolutions, employment or management agreements, STAK documentation and the cap table.

Investor consent rights require particular attention. A shareholders’ agreement may require investor approval for creating or increasing an employee pool, issuing options, granting unusually large awards or changing the terms of an existing incentive plan.

At the same time, founders need sufficient flexibility to make ordinary-course grants without returning to the investors for every hire. This balance should be agreed during the financing round. It should not be discovered after signing.

The broader objective should be to make the BV structurally employee-equity-ready. I discuss that approach in Making Dutch Employee Equity Work More Like a US Option Pool.

Employee equity becomes an M&A due diligence issue

The same rights that help a startup attract employees during its growth phase can create execution issues when the company is sold. A buyer will want to understand all existing employee and management participation rights. That includes vested and unvested options, SARs, phantom rights, STAK certificates, informal promises and rights triggered by a change of control.

For options, the sale documentation may need to address exercise before completion, cash settlement, acceleration, waiver of rights and participation in the sale process. For SARs, the questions are different. Who pays the cash entitlement? Is it paid before, at or after closing? Does it reduce equity value or otherwise affect the purchase price mechanics? How are deferred consideration and earn-outs treated when calculating the SAR payout?

Unclear incentive documentation can therefore become a closing issue rather than merely an employment matter.

For PE and strategic buyers, this is particularly relevant where management is expected to remain invested or receive new incentives after completion. Existing participation rights should be mapped before a new management participation structure or rollover arrangement is agreed.

What foreign investors should review now

The proposed legislation creates a useful moment for Dutch startups and their investors to review existing arrangements.

For companies with genuine employee options, the first question is whether the company and the grants could fall within the new regime. Options granted since 17 April 2025 deserve particular attention because of the proposed transitional provisions.

The second question is whether the option plan is legally ready for a future financing or exit. Outstanding grants should reconcile with the fully diluted cap table, shareholders’ agreement, articles of association and corporate approvals.

The third is whether the chosen instrument is still the right one. For some employees, actual options may become more attractive if the new regime takes effect. For others, a STAK or contractual SAR arrangement may remain more practical because governance, administration or exit mechanics matter more than direct share ownership.

Tax and legal structuring should therefore be considered together, while keeping the respective adviser roles distinct.

For international investors entering a Dutch financing round, these issues form part of the wider Dutch venture capital workstream, alongside the investment agreement, shareholders’ agreement, investor rights, articles of association, corporate approvals and notarial implementation.

Box 3 is no longer a stable basis for designing an employee equity plan

Earlier proposals for the future Dutch box 3 regime created an additional concern around direct ownership of illiquid startup shares. A system based on annual taxation of unrealised gains could create a significant liquidity issue where a participant holds valuable shares but cannot sell them.

The direction of the future regime is now being reconsidered.

On 15 September 2026, the Dutch government stated that the new box 3 regime should be developed further towards a capital gains system, under which taxation of value appreciation would be more closely linked to realisation. The government intends to present further proposals at a subsequent budgetary decision-making stage.

That makes the 2027 employee option proposal the more concrete development for current employee equity planning. Startups and investors should avoid designing a long-term participation structure around a future box 3 architecture that is still moving.

Practical conclusion

The proposed Dutch startup option regime could materially improve the position of genuine employee share options from 2027.

For foreign VC investors, international founders and deal counsel, however, the main lesson is not simply that Dutch options may become more tax-efficient.

The instrument still has to work as part of the Dutch BV structure.

Before a financing round, investors should understand the fully diluted pool, existing equity promises, grant documentation, vesting, leaver treatment, corporate approvals and the route from option exercise to valid Dutch shares.

Before an exit, buyers and sellers should know exactly how each option, SAR, certificate or phantom right is treated at closing.

A better tax regime can make employee equity more attractive. It does not replace proper cap table, governance and transaction implementation.

FAQ

Will the new Dutch startup option regime automatically apply from 1 January 2027?

No. The bill was submitted to the Dutch Parliament on 15 September 2026 but has not yet completed the legislative process. The company and the relevant option rights must also satisfy the statutory requirements.

Does the proposed regime apply to every Dutch startup?

No. The special regime is linked to qualifying startups and scale-ups and requires the relevant RVO determination.

Are SARs covered by the new share-option regime?

They should not be assumed to be. SARs are generally contractual economic rights rather than rights to acquire actual shares. Their tax treatment should be reviewed separately.

Can options already granted before 2027 benefit from the proposal?

Potentially. The proposed transitional regime can apply to qualifying employee share options granted on or after 17 April 2025 that have not already been taxed by the end of 2026, subject to the statutory requirements.

What should a foreign investor review when diligencing a Dutch employee equity plan?

The investor should review the instrument used, the fully diluted cap table, pool size and dilution, corporate approvals, grant documentation, vesting and leaver rules, exercise mechanics, investor consent rights and treatment on an exit.

About Dirk de Waard

Dirk de Waard is a Dutch corporate, M&A and venture capital lawyer and partner at Venture Lawyers in Amsterdam. He advises international investors, founders, growth companies and deal counsel on Dutch venture capital transactions, employee participation, option pools, SAR structures, shareholders’ agreements and Dutch BV implementation.

Reviewing employee equity as part of a Dutch financing round, investment or exit?

Employee participation should be reviewed together with the cap table, investment documentation, shareholders’ agreement, corporate approvals and future exit mechanics.

Dirk advises international investors, founders and deal counsel on the Dutch corporate-law workstream and coordinates with specialist tax advisers where the structure requires tax analysis. Contact Dirk at dirk.dewaard@viottalaw.com to discuss the Dutch implementation of an employee equity plan.