Corporate tax changes

The Dutch Cabinet in response to last spring’s publication of a report by the Advisory Committee on Taxation of Multinationals has formulated (draft) legislation aimed at enabling the implementation with effect from the first of January 2022 of two of the Committee-proposed remedial measures. The first of these is aimed at imposing a cap of 50 percent of taxable profits on the set-off of losses in excess of one million euros, in exchange for removing the temporal loss carry-forward restriction (to which a six-year maximum currently applies). The change in question has since been bolted on to the 2021 Tax Plan by means of a memorandum of amendment to the relevant effect. The second remedial measure is to be worked up into a separate Bill for submission to the Lower House of the Dutch Parliament in the spring of 2021, the gist of it being the departure effectively from the arm’s length principle where the application thereof would lower the taxable profit in the Netherlands whereas the adjustment in question would not, or only partially, be included in the tax base of the other country involved in the transaction.

Dutch version: Aanpassingen in vennootschapsbelasting