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Proposed employee stock option rules for the Netherlands

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The new employee stock option rules should enter into force on January 1 2022

Jian-Cheng Ku and Ilse Lagerweij of DLA Piper Netherlands discuss the proposed rules that amend the wage tax treatment of employee stock options.

On May 31 2021 a legislative proposal regarding the treatment of employee stock options was published by the Dutch government for public consultation. 

The newly proposed rules amend the wage tax treatment of employee stock options to stimulate the issuance of such stock options. Under the newly proposed rules taxation on employee stock options can be deferred until the option is tradeable instead of taxation when exercising the stock option. The consultation period ends on June 30 2021.

Current rules

If an employee is granted an employee stock option this is considered wage for the purpose of the Dutch Wage Tax Act. Currently, wage tax will be imposed when exercising or selling the stock option.

The taxable amount is determined by the fair market value of the employee stock option at the point of taxation, minus the consideration that the employee paid for the stock option (if any).

The Dutch government already provided for a beneficial rule under the current legislation to support start-ups and scale-ups in attracting qualified personnel by stimulating issuance employee stock options. However, the beneficial rule did not have the desired impact as start-ups and scale-ups hardly applied for it. Hence the newly proposed rules have a more generic character to ensure impact.

Currently, only 75% of the fair market value of an employee stock option package is taken into account insofar the employee stock option is not valued at more than €50,000 (approximately $60,000) and (i) the employer has a so-called R&D declaration (S&O verklaring); and (ii) a minimum of 12 months and a maximum of five years have passed after granting the stock option.

Proposed rules

Under the new rules, taxation can be deferred by the introduction of a new taxation moment: when the stock option is tradeable. The taxpayer can also choose to opt out.

The stock option is considered tradeable from the moment that the employee has the right to sell the stock option. This is also the case if the employee can sell the stock option under restrictions, such as a limitation to solely sell the shares to other employees of the company. 

Taxation can only be deferred up to a maximum of five years. To avoid long-term deferral all stock options are considered tradeable after this period. 

The new employee stock option rules should enter into force on January 1 2022.


The purpose of the more generic new rules is to grant a liquidity benefit to employees with employee stock options by deferring the taxable moment to the moment they have the possibility to sell. 

This should support start-ups and scale-ups with finding qualified personnel by offering a competitive incentive plan to employees. As the application of the new rule is not subject to requirements, non-start-up or scale-up taxpayers are also eligible to apply for taxation at the moment the stock option is tradeable. 

Although the newly proposed rules provide for more flexibility to employees, it is important to realise that the taxable amount is determined on the basis of the fair market value of the stock options at the moment taxation is triggered. 

If the fair market value has increased substantially between exercising the stock option and when the stock option becomes tradeable, more wage tax might be due if the taxpayer is taxed when the stock option is tradeable. This is something to keep in mind, especially in cases where new (and higher) valuations of stocks are to be expected, e.g. series A or B funding and in case of impending IPO.

Jian-Cheng Ku

Partner, DLA Piper



Ilse Lagerweij

Associate, DLA Piper 



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