Amendments to the Dutch Minimum Tax Executive Decree 2024
30/12/25
The Year-End Decree 2025 amends certain parts of the Netherlands Minimum Tax Executive Decree 2024 (NL MTED 2024) and introduces specific rules for the:
- Assessment of the revision period for aggregated deferred tax liabilities (Article 6a NL MTED 2024);
- Allocation of covered taxes in cases of cross-crediting of taxes (Article 6b NL MTED 2024);
- Computation of the total deferred tax adjustment amount when allocating covered taxes (Article 6c NL MTED 2024);
- Purchase price accounting adjustments in qualifying financial statements (Article 7a NL MTED 2024);
- Consistency standard and application of the qualified domestic minimum top-up tax safe harbor (Article 8 NL MTED 2024).
The Decree enters into force on 1 January 2026. The amendments have retroactive effect and apply to fiscal years beginning on or after 31 December 2023. An exception applies to the measure related to the application of the switch-off rule for constituent entities that have created deferred tax assets (DTAs) to which the transitional rules in the Dutch minimum tax legislation apply (see further below). This measure takes effect on 31 December 2025 and applies to fiscal years beginning on or after that date.
The Dutch Year-End Decree 2025 was published in the Official Gazette of the Netherlands on 23 December 2025 (Decree of 19 December 2025, Official Gazette 2025, 451) and amends certain parts of the Netherlands Minimum Tax Executive Decree 2024 (NL MTED 2024). Various elements of the agreed administrative guidance (AAG) from the Inclusive Framework on BEPS of December 2023, June 2024, and January 2025 are incorporated into the Dutch minimum tax legislation, based on the delegation provisions in the Dutch Minimum Tax Act 2024 (Articles 7.3, 7.5, 8.8, and 8.13 NL MTA 2024).
The Year-End Decree also amends various Executive Decrees in direct taxation in the Netherlands (income taxation, wage taxation, inheritance taxation, value added taxation, motor vehicle taxation, environmental taxation, General Tax Act, Decree on the Prevention of Juridical Double Taxation 2001, minimum taxation). The amendments stem from the 2026 Budget Day Tax package. Earlier, on 9 July 2025, a draft Year-End Decree 2025 was published for consultation on the Dutch government’s website.
After a general explanation of the Dutch minimum tax, an overview of the various measures is given below.
What does this mean for your company?
The measures in the Decree of 19 December 2025 come into play when your company falls within the scope of the Pillar Two rules. Pillar Two concerns the 15% global minimum tax system for large companies introduced in various countries at the end of 2023. The Netherlands has implemented Pillar Two in the Dutch tax legislation via the Dutch Minimum Tax Act 2024 (NL MTA 2024).
The Decree incorporates several parts of the Agreed Administrative Guidance of the Inclusive Framework. Since the publication by the Inclusive Framework of the Model Rules in 2021 and the (consolidated) Commentary on the Model Rules in 2022, 2024 and 2025, the Inclusive Framework published several sets of agreed administrative guidance in subsequent years. Some of these have already been included in the Dutch legislation implementing Pillar Two in the Dutch legal order, some have not. Where the Inclusive Framework guidance not only provides interpretative guidance and requires a legal basis whereby lower legislation suffices, the Decree has incorporated these guidances into the Dutch Pillar Two legislation.
Pillar Two is a challenge from a compliance perspective. The measures may give rise to far-reaching compliance costs and/or an increases or decreases in top-up taxation as provided for in the Pillar Two legislation. It is advisable to properly map out the implications of the measures now implemented for your company.
General
The NL MTA 2024 applies as of 31 December 2023. The NL MTA 2024 provides for a minimum tax level of 15% per jurisdiction for large companies (annual turnover more than 750 million euros). If the company tax burden is lower than 15% in the Netherlands or in another jurisdiction, top-up tax is levied up to that level. In this way, the Netherlands is implementing Pillar Two, the second pillar of the international two-pillar solution on which approximately 140 countries reached political agreement within the Inclusive Framework in 2021. The NL MTA 2024 applies to fiscal years starting on or after 31 December 2023. The minimum tax also applies on Bonaire, Saint Eustatius and Saba, the BES Islands of the Kingdom of the Netherlands.
Within the EU, the introduction of Pillar Two takes place via Directive (EU) 2022/2523 of 14 December 2022. This Directive is based almost entirely on the Model Rules published by the OECD on 20 December 2021. The OECD published a Commentary on the Model Rules on 14 March 2022, which can be used in the interpretation of the new rules in the implementing countries. In 2023 and 2024, the OECD published several sets of Agreed Administrative Guidance, many of which have been adopted in the Minimum Tax Act 2024.
The purpose of the Decree is to transpose Agreed Administrative Guidance of the Inclusive Framework of December 2023, June 2024 and January 2025 into the Dutch tax legislation. This is to promote the consistent application of the OECD’s Model Rules and to avoid mismatches with other jurisdictions. The government of the Netherlands considers the retroactive effect to 31 December 2023 justified. The measures are not considered problematic for taxpayers.
Assessment of the revision period for aggregated deferred tax liabilities (DTLs)
The Dutch Minimum Tax Act 2024 includes the so-called DTL recapture rule (Article 7.3(7) NL MTA 2024). This rule stipulates that deferred tax liabilities (DTLs) created in relation to, for example, intangible assets must be reversed for purposes of calculating the effective tax rate for Pillar Two purposes if and to the extent these liabilities are not settled within 5 years. The application of this rule lowers the effective tax rate for Pillar Two purposes and may, in certain cases, trigger a top-up tax to reach the 15% minimum tax level.
The Decree provides rules under which a constituent entity can assess, for an aggregated DTL related to a general ledger account or an aggregated DTL category, whether the DTL recapture rule applies (Article 6a NLMTED 2024). This allows tracking on an aggregated basis – rather than per individual deferred tax liability – whether there is an increase or decrease in the relevant DTL category. In certain cases, a FIFO (first-in-first-out) approach may be used. The measure aims to provide a methodology for monitoring DTLs for minimum tax purposes that aligns with financial reporting practices.
The measure in the Decree is consistent with Section 1 of the administrative guidance from the Inclusive Framework of June 2024. The measure has retroactive effect to 31 December 2023.
Allocation of covered taxes in cases of cross-crediting of taxes
The Dutch Minimum Tax Act 2024 regulates the allocation of covered taxes for purposes of calculating the effective tax rate for Pillar Two purposes to certain types of constituent entities, such as permanent establishments (PEs), controlled foreign companies (CFCs), (reverse) hybrid constituent entities, and constituent entities that have made a distribution (Article 7.5 NL MTA 2024). In short, these taxes are allocated to the relevant permanent establishments, CFCs, hybrid entities, and distributing entities, insofar as these taxes relate to their qualifying income or loss for minimum tax purposes.
The Decree sets rules for allocating covered taxes to these entities when, under the corporate income tax system applicable in their jurisdiction, cross-crediting is available in the hands of the head office or shareholder entity (e.g., a CFC shareholder) involved (Article 6b NL MTED 2024). Cross-crediting may be available when countries allow for double tax relief pursuant to the ordinary credit method by reference to an overall limitation. The Decree introduces an allocation mechanism based on a formula that aims to proportionally disentangle cross-credited covered taxes for minimum tax purposes.
The allocation system does not apply to taxes allocated under a blended tax regime for foreign controlled entities (blended CFC regime), such as the Global Intangible Low-Taxed Income (GILTI) rules (now Net CFC-Tested Income (NCTI) rules) in the United States corporate tax system. For these blended CFC regimes, a separate allocation mechanism applies, laid down in Article 6 NLMTED 2024.
This measure in the Decree is consistent with Section 3.1 of the administrative guidance from the Inclusive Framework of June 2024. The measure has retroactive effect to December 31, 2023.
Computation of the total deferred tax adjustment amount when allocating covered taxes
The Dutch Minimum Tax Act 2024 regulates how the total deferred tax adjustment amount is determined for purposes of calculating the amount of adjusted covered taxes (Article 7.3 NL MTA 2024). For example, deferred tax liabilities recorded in the financial statements at a statutory corporate tax rate higher than the 15% minimum rate must be recalculated to the minimum rate.
The Decree introduces specific rules for determining the total deferred tax adjustment amount for purposes of the allocation of covered taxes to certain constituent entities (Article 6c NL MTED 2024). These are the same entities mentioned in the section above: permanent establishments, CFCs, (reverse) hybrid constituent entities, and entities that have made a distribution (Article 7.5 NL MTA 2024). The Decree introduces an allocation mechanism based on a formula. This formula ensures that only a net total deferred tax adjustment amount is included in the allocation.
This measure in the Decree is consistent with Section 4.2 of the administrative guidance from the Inclusive Framework of June 2024. The measure has retroactive effect to 31 December 2023.
Purchase price accounting (PPA) adjustments in qualifying financial statements
The Dutch Minimum Tax Act 2024 includes the Transitional CbCR Safe Harbour (Article 8.8 NL MTA 2024). For fiscal years beginning on or before 31 December 2026 and ending before July 1, 2028, multinational groups can opt for a light version of the Pillar Two rules for each jurisdiction in which they operate. Using qualifying CbCR data and qualifying financial statement data, these groups can demonstrate that they are not underpaying taxes in that jurisdiction. The top-up tax for that jurisdiction is then set to zero.
The Decree introduces specific rules for purchase price accounting (PPA) adjustments in financial reporting for purposes of applying the transitional CbCR safe harbor rules (Article 7a NL MTED 2024). The measure aims to prevent the effective tax rate from falling below the intended minimum tax level in certain cases.
If adjustments to the book value of assets and liabilities attributable to the acquisition of a constituent entity are reflected in that entity’s financial reporting (i.e., PPA adjustments are included in the constituent entity’s reporting package or separate financial statements), then this reporting is generally not considered a qualifying financial reporting pursuant to the transitional CbCR safe harbor rules. This applies unless two conditions are met. The financial reporting (with PPAs) will still qualify if:
- the MNE Group has not submitted a CbC Report for a fiscal year starting after 31 December 2022 that was based on the constituent entity’s reporting package or separate financial statements without the PPA adjustments, unless the constituent entity was legally required to include these PPA adjustments in its reporting – i.e., the so-called consistent reporting condition, and;
- any reduction in the constituent entity’s income attributable to an impairment of goodwill related to transactions entered into after November 30, 2021 is added back to pre-tax income for purposes of the effective tax rate calculation and the routine profit calculation pursuant to the CbCR safe harbor rule, provided that no deferred tax effects are included in the financial accounts (i.e., no reversal of deferred tax liabilities or recognition of deferred tax assets) – i.e., the so-called goodwill impairment adjustment.
The measure in the Decree on PPAs in the context of the operation of the CbCR safe harbor rules is consistent with Section 1 of the administrative guidance from the Inclusive Framework of December 2023. The measure has retroactive effect to 31 December 2023.
Consistency standard and application of the qualified domestic minimum top-up tax safe harbor
The Dutch Minimum Tax Act 2024 includes the qualified domestic minimum top-up tax (QDMTT) safe harbor rule (Article 8.13 NL MTA 2024). Multinational groups can opt to set the top-up tax under the income inclusion rule (IIR) in the jurisdiction where the group’s parent entity is located to zero by complying with the qualified domestic minimum top-up tax safe harbor rule in the jurisdictions in which they operate via their constituent entities. The safe harbour is only available if the relevant jurisdiction has implemented this safe harbor rule in its legal order and, in principle, if the calculations are based on local financial reporting standards (instead of the standards applicable in the jurisdiction of the ultimate parent entity).
The Decree introduces specific rules on meeting the so-called consistency standard in the qualified domestic minimum top-up tax safe harbor (Article 8.13(1)(b) NL MTA 2024) and the application of the so-called switch-off rule in this context (Article 8 NL MTED 2024). The switch-off rule stipulates that if a jurisdiction chooses not to impose a qualified domestic minimum top-up tax on certain types of entities, the qualified domestic minimum top-up tax (QDMTT) safe harbor rule does not apply to those entities. For these entities, the top-up tax must be calculated for purposes of applying top-up taxation pursuant to the income inclusion rule (IIR) and/or the undertaxed profits rule (UTPR).
The Decree specifies that the switch-off rule also applies to securitization entities. A securitization entity is a legal vehicle that bundles financial assets such as loans, mortgages, and receivables into tradable securities for portfolio investors. Furthermore, the Decree provides that the switch-off rule also applies to group entities that have created deferred tax assets (DTAs) to which the transitional rules in the minimum tax legislation apply, and where the utilization of those DTAs for purposes of calculating the domestic minimum top-up tax in the jurisdiction involved is not excluded from the total deferred tax adjustment amount, or from the simplified covered taxes calculations for CbCR safe harbour purposes (Article 14.1 NL MTA 2024). Finally, the Decree clarifies that the application of the switch-off rule to certain constituent entities does not prevent the application of the qualified domestic minimum top-up tax safe harbor to other constituent entities in the respective jurisdiction involved.
The measure in the Decree for securitization entities is consistent with Section 6 of the administrative guidance from the Inclusive Framework of June 2024. This measure has retroactive effect to 31 December 2023. The measure in the Decree for constituent entities that have created abovementioned DTAs is consistent with the agreed administrative guidance from the Inclusive Framework of January 2025. This measure takes effect on 31 December 2025 and applies to fiscal years beginning on or after that date.
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