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October 24, 2022

Netherlands launches consultation on BEPS 2.0 Pillar Two implementation

  • The Dutch Government has released a draft legislative proposal for the domestic implementation of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two agreement.”

  • The draft legislative proposal is based on the compromise text of the draft European Union (EU) Directive dated 16 June 2022 and includes the proposed introduction of a Qualified Domestic Minimum Top-up Tax (QDMT).”

  • The draft is open for consultation and submissions are due by 5 December 2022.”

On 24 October 2022, the Dutch Government released a draft legislative proposal as part of a public consultation process on how to implement the proposed BEPS 2.0 – Pillar Two global agreement in its domestic legislation. The proposal is structured as a separate tax law that is not intended to be embedded into the existing Dutch Corporate Income Tax Code.

Interested parties and stakeholders have until 5 December 2022 to submit input.

Pillar Two primarily consists of two interlocking domestic rules, together referred to as the Global Anti-Base Erosion (GloBE) rules, which will introduce a global minimum effective tax rate of 15% for in-scope businesses. These two rules are referred to as the Income Inclusion Rule (IIR) and Undertaxed Payment Rule (UTPR). The remaining element of Pillar Two, the Subject to Tax Rule, is a treaty-based rule which will apply where certain intra-group cross-border payments are subject to low levels of taxation.

The draft legislative proposal is based on the draft EU Directive to implement the OECD Pillar Two agreement within the EU, and more specifically the compromise text of 16 June 2022. In line with that compromise text, the Dutch Government proposes that the IIR and the UTPR become effective for financial reporting years starting on or after 31 December 2023 and 31 December 2024 (respectively). Notably, the Dutch Government also makes use of the possibility provided by the draft EU Directive to propose the introduction of a QDMT such that – essentially – any top-up tax to be paid by Dutch constituent entities that are part of an in-scope multinational group will be collected by the Dutch Government.

With reference to the joint statement by France, Germany, Italy, Spain and the Netherlands from 9 September 2022,1 the Dutch Government once more underscores its commitment to implement these minimum taxation rules per the timeline mentioned above even if unanimous consent is not reached among the EU Member States.

Updated communications will follow as the consultation and legislative process progresses.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP, International Tax and Transaction Services, Amsterdam

Ernst & Young Belastingadviseurs LLP, International Tax and Transaction Services, Rotterdam

Ernst & Young LLP (United States), Netherlands Tax Desk, New York

Ernst & Young LLP (United States), Netherlands Tax Desk, Chicago

Ernst & Young LLP (United States), Netherlands Tax Desk, San Jose/San Francisco

Ernst & Young Tax Services Limited (Hong Kong), Netherlands Tax Desk, Hong Kong

Ernst & Young (China) Advisory Limited (China Mainland), Netherlands/EMEA Tax Desk, Beijing

Ernst & Young (China) Advisory Limited (China Mainland), Netherlands/EMEA Tax Desk, Shanghai

EY Corporate Advisors Pte Ltd (Singapore), Netherlands/EMEA Tax Desk, Singapore

Ernst & Young LLP (United Kingdom), Netherlands Tax Desk, London

Ernst & Young Tax Co (Japan), Netherlands/EMEA Tax Desk, Tokyo



  1. See EY Global Tax Alert, Five major EU Member States commit to swift implementation of Pillar Two by any possible legal means, dated 13 September 2022.

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