Netherlands

The corporate tax system of the Netherlands contains a number of well-known features providing for an attractive investment climate, such as: the fiscal unity regime with tax consolidation for group companies, a full participation exemption for capital gains and dividends from qualifying participations, and several favourable tax regimes (e.g. for patent income, investment vehicles, and income from ocean shipping activities). As of 2021, a withholding tax (WHT) on interest and royalties is due in certain situations, namely where the recipient is based in a low-tax jurisdiction or a non-cooperating jurisdiction in respect of information exchange, or in cases of abuse. As of 2024, this WHT also applies to dividends. For more information, see Conditional WHT on interest, royalty, and dividend payments in the Withholding taxes section.

Pillars One and Pillar Two

The Netherlands implemented Pillar Two as of 31 December 2023, in line with the European Union (EU) Pillar Two Directive. The Dutch legislation l is almost entirely in line with the Directive. Entities established in the Netherlands that are part of a (multinational or large domestic) group with a consolidated group turnover of at least 750 million euros (EUR) will fall within the scope of the new legislation. Certain sectors, such as investment funds and pension funds, are outside the scope of Pillar Two.

Pillar One aims to allocate new taxing rights to market jurisdictions, even in absence of physical presence, via the introduction of a new set of tax rules potentially operating on top of the existing ones. Pillar One will apply to multinational enterprises (MNEs) with profitability above 10% and global turnover initially above EUR 20 billion. In October 2024, the members of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework) published the text of the Multilateral Convention to Implement Amount A of Pillar One with additional guidance.

Currently, the Netherlands does not levy a digital service tax.

Conditional source taxation on dividends

The conditional source taxation regarding interest and royalties includes dividends as of 1 January 2024 (see the Withholding taxes section).

Carbon Border Adjustment Mechanism (CBAM)

CBAM applies to imports of more than 50 tonnes of CBAM goods into the EU per year. CBAM goods are certain goods and selected precursors whose production is carbon intensive and at the most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen.  

From 2026, the transition phase of CBAM will be completed and the mechanism will be fully operational. To facilitate this, the Dutch Environmental Management Act will include various implementation-focused measures. 

Read more here.

2026 Tax Plan

The 2026 Tax Plan includes a.o. the following tax measures for corporate tax: 

• Temporary transitional law for Mutual Funds (FGR) 

• Several technical changes and incorporates remaining elements from the administrative guidance of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) in the Dutch Pillar 2 legislation 

Read more on 2026 Tax Plan here.

Temporary transitional law for Mutual Funds (FGR) 

An investigation is underway into the potential issue that some partnerships may qualify as a mutual fund (in Dutch: fonds voor gemene rekening, FGR) as of 1 January 2025, and thus the partnership itself becomes taxable. This may lead to a revision of the FGR definition. As a result, funds that qualify as an FGR from 2025 may no longer be considered as such starting in 2027. 

To prevent short-term tax liability (i.e., for 2025 and 2026), a transitional measure is proposed. This allows entities that were considered fiscally transparent through 2024 to opt out of being classified as an FGR starting on 1 January 2025. 

Entities can opt into this transitional regime until 28 February 2026. The transitional regime will expire on 1 January 2028. If the FGR definition is amended effective from 1 January 2027, the transitional regime will expire at that time. 

The temporary transitional regime also applies to foreign legal forms that are comparable to an FGR. 

Business in Europe: Framework for Income Taxation (BEFIT)

BEFIT, short for “Business in Europe: Framework for Income Taxation”, is a Directive proposal by the European Commission issued on 12 September 2023. BEFIT introduces an aggregated common company tax base for the so-called “BEFIT groups” that is distributed among the EU Member States on the basis of a 7-year transitional allocation rule for the further application of domestic Corporate Income Tax (CIT) rules. It is still under discussions at the EU level and it is a long-term project of the European Commission. 

See our EU Gateway publication 'BEFIT proposal: a new company tax system in the EU?' for more information on BEFIT as well as its parallel application with Pillar Two laws in the European Union. 

Head Office Tax (HOT) system proposal

The HOT system proposal aims to mitigate the compliance challenges that small and medium-sized enterprises (SMEs) face in the European Union. The optional system would allow permanent establishments (PEs) in the European Union to compute their profits according to the rules of the head office state. Moreover, it would create a one-stop-shop in the head office state for filling, assessment, and collection of tax. 

The Dutch government supports the Commission's aim to assist SMEs but raises concerns about the proposal’s effectiveness and scope, including the sidelining of Dutch policy when the Netherlands is the PE state. Yet, the proposal for SMEs failed to gain sufficient support. EU Member States suggested exploring alternative approaches to support SMEs beyond the legislative framework.

Reporting obligations for digital platform operators (DAC7)

Through the DAC7 Directive, the European Union is introducing new measures to increase tax transparency in the digital economy. Digital Platform Operators are targeted to identify, trace, and report on revenues made by sellers on their digital platforms. DAC7 is implemented in national law as of 1 January 2023. Digital Platform Operators are required to report on the year 2023 for the first time in 2024. Digital Platform Operators should already have seller due diligence procedures and controls in place as of 1 January 2023.

Treaty developments

The Netherlands pursues an active tax treaty policy in order to maintain and extend its wide tax treaty network. Most Dutch bilateral tax treaties are based on the OECD Model Tax Convention. The government has expressed that treaties with developing countries will be based on the United Nations (UN) Model Convention more often than was the case. In addition, in a press release dated 14 March 2024, it was stated that the Netherlands strives to include anti-abuse measures in its tax treaties with developing countries.

The Netherlands has concluded bilateral tax treaties for the avoidance of double taxation on income and capital with over 90 countries worldwide. As of 1 July 2019, the multilateral instrument (MLI) has entered into force for the Netherlands. It first had effect on 1 January 2020.

New treaties are concluded regularly: new treaties were signed with Belgium (2023), Moldavia (2023), Bangladesh (2024 and Thailand (2025) (all are yet to come into effect). In 2025 the new treaty with Andora and Kyrgyzstan became effective.

Currently double tax treaties are negotiated or renegotiated with 11 countries: Aruba, Belgium, Benin, Brazil, Ecuador, Mozambique, Portugal, Romania, Surinam, Sweden and Uganda.  

EU Gateway: A coordinated support for non-EU clients

EU Gateway (an initiative of PwC Netherlands) is dedicated to provide coordinated support for non-EU clients to navigate through the complex EU tax and legal landscape. Through our extensive network of tax and legal specialists, we offer coordinated assistance, helping non-EU clients understand and comply with the complex tax and legal regulations in the European Union. 

We offer tailored and coordinated guidance and expertise by working together with our network of tax and legal specialists across the European Union, Middle East, Asia, Africa, and the United States to assist non-EU clients with navigating the complexities of EU tax and legal matters and explaining the implications for them.  

Our insights and services empower our clients to:

• anticipate the ever-evolving EU regulations
• create opportunities and long-term value for their business in terms of establishment in the European Union, and
• minimise risks as a result of continuous transformation of EU tax and legal developments and act effectively in response.

Take a look at our dedicated website for more information on how we can assist you.