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Netherlands

CMS Expert Guide to Mastering OECD's Pillar Two in the Netherlands

Key stages in the introduction of global minimum taxation

Table of contents
  1. Has there been a formal indication of the intention to implement Pillar Two/GloBE rules?
  2.  What is the implementation status of Pillar Two/GloBE rules?
  3.  Have your tax authorities published guidelines commenting on Pillar Two/GloBE rules?
  4.  When will the Income Inclusion Rule (IIR) come into force?
  5.  When will the Undertaxed Payments Rule (UTPR) come into force? 
  6.  Is there any intention to implement a Qualifying Domestic Minimum Top-Up Tax (QDMTT)? If so, when?
  7. Further comments
Netherlands
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1.Has there been a formal indication of the intention to implement Pillar Two/GloBE rules?

Yes.

2. What is the implementation status of Pillar Two/GloBE rules?

Dutch rules transposingt he EU Minimum Taxation Directive  entered into force as per 1 January 2020

September 20, 2023:  it was decided that the legislative proposal regarding Pillar 2 will be debated together with the Dutch 2024 Tax Plan.

May 30, 2023: the legislative proposal regarding Pillar Two (Wetsvoorstel minimumbelasting 2024) was submitted to the House of Representatives of the States General. 

3. Have your tax authorities published guidelines commenting on Pillar Two/GloBE rules?

The Explanatory Memorandum to the legislative proposal contains a comprehensive discussion of the (Dutch) interpretation of the Pillar 2 rules.  In the Explanatory Memorandum it is mentioned that the legislative proposal is based on the OECD commentaries and therefore the OECD commentaries can serve as a source of interpretation (as also follows from the EU Directive on Pillar 2).  

4. When will the Income Inclusion Rule (IIR) come into force?

2024.

5. When will the Undertaxed Payments Rule (UTPR) come into force? 

2027, 2025 (or 2024 in a specific situation) 

6. Is there any intention to implement a Qualifying Domestic Minimum Top-Up Tax (QDMTT)? If so, when?

2024.

7. Further comments

The Netherlands has opted for transposing the Pillar 2 measures in a separate tax act and not to include it in the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969).
The legislative proposal provides for the implementation of a DMTT, the IIR and the UTPR in the Netherlands. Noteworthy is that the UTPR will be implemented as a seperate top-up tax in the Netherlands instead of a  deduction limitation. Furthermore, the UTPR wil be enter into force as of 2025, except when a Dutch group entity is owned by an ultimate parent entity residing in an EU Member State that has elected to defer the application of the IRR and the UTPR. In such case, the Netherlands will apply the UTPR rule one year earlier, i.e. from 2024. Furthermore, in a recent memorandum of amendment of 13 October 2023, it is proposed to include the so-called Transitional UTPR Safe Harbour rule which can be invoked in relation to entities that are resident in a state where the DMTT and IIR are not implemented in time and are subject to a statutory tax rate of at least 20%. This rule is applicable until 31 December, 2026. 
The Netherlands is reluctant to impose sanctions during the transition period. However, this transitional regime will not apply in cases of fraud or deliberate intent. The restraint on the imposition of penalties will also not apply to default penalties.