The government is planning to scrap the 21% value added tax rate on solar panels on private homes from next January.
Tax minister Marnix van Rij put draft legislation which will remove the tax from solar panels and installation work for private households out to consultation on Wednesday.
EU member states have been able to scrap the tax on solar panels since the end of last year.
Currently home owners who install solar panels which feed into the national grid can claim the tax back, but they do have to register and file a tax return to benefit.
Van Rij hopes the new measure will cut back on paperwork for both private people and the tax office.
The tax break will not apply to solar panels which have been installed on public buildings or commercial property.
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