Tax Accounting impact 2027 Tax Plan

Here you can find an overview of the measures of the 2027 Tax Plan. In this part of our publication, we focus on three developments in the Dutch Corporate Income Tax Act (‘CITA’) from a tax accounting point of view.

Increase of the Energy Investment Allowance deduction percentage

The percentage of the Dutch Energy Investment Allowance (‘EIA’) will be increased from 40% to 45.5%. The EIA allows an additional deduction from taxable profit for qualifying investments in new, energy-efficient business assets, subject to, inter alia, timely electronic notification and the required confirmation from the competent authority. 

The increase in the percentage provides an additional current tax benefit. The EIA is an additional deduction on top of regular depreciation and does not reduce the tax base of the underlying asset. Therefore, the proposed measure should generally affect the current tax charge only rather than giving rise to a deferred tax effect. 

Currency results on hedging instruments under the participation exemption

Article 13(7) of the Dutch Corporate Income Tax Act allows currency results on a transaction that hedges the foreign-exchange risk relating to a participation to fall within the scope of the participation exemption, provided that the tax inspector has confirmed this in advance by way of a decision open to objection. Under the proposed measure, this treatment will remain available, upon request, for non-priced-in or unpredictable currency results. It will no longer be available for priced-in currency results, being currency results that could be expected due to the relative strength or weakness of the relevant currencies.

For financial reporting purposes, companies should reassess the current and deferred tax treatment of the relevant hedging instruments once the measure is substantively enacted. If the participation exemption no longer applies on the hedging instrument, this will impact the effective tax rate (in comparison to previous year(s)) since the foreign exchange result is no longer giving rise to a permanent difference. Any deferral of taxable unrealised foreign exchange results impacts the tax base and as such could give rise to corresponding Deferred Tax Assets and/or Liabilities (“DTAs”/”DTLs”). In case the distinction between priced-in and non-priced-in currency results is uncertain, the requirements for uncertain tax treatments pursuant to IFRIC 23 should also be considered.

Interest deduction limitation for housing corporations abolished

From 2028, housing corporations will be fully exempt from the earnings-stripping interest deduction limitation rule (an ATAD measure), meaning that the full net interest balance will be deductible each year, subject to any other limitations. The current system will continue to apply to the interest balance carried forward that arose in financial years commencing before 1 January 2028.

For financial reporting purposes, the carry forward of disallowed interest  may be deductible in future years.  An assessment should be made whether a DTA can be recognised for the interest that was not deducted in previous periods and should consider to the extent that it is probable that taxable profit will be available against which the disallowed interest carry forward can be utilised. In particular, consider the impact of reversing deferred tax liabilities. When there are insufficient DTLs available, the other sources of taxable profit are considered. Once the tax law change is (substantively) enacted, it could potentially result in a lower current tax charge as of 2028 as additional interest expenses could be deductible. 

As part of the Dutch 2027 Tax Plan package, the Dutch government submitted the legislative proposal Safe Harbour Rules Dutch Minimum Tax Act 2024 to the House of Representatives. The proposal implements the Side-by-Side (“SbS”) Package agreed within the OECD Inclusive Framework on 5 January 2026. The legislative proposal introduces four new safe harbours under Pillar Two, extends the transitional Country-by-Country Reporting Safe Harbour and provides for more favourable treatment of certain tax incentives, subject to conditions. Although the legislation will enter into force on 1 January 2027, several measures will apply retrospectively from 31 December 2025 or 1 January 2026. Also read our Tax News article ‘The Netherlands implements Side-by-Side package.

In this part of our publication, we focus on the tax accounting related elements of the draft legislative bill.

The extension of the Transitional CbCR Safe Harbour

The Transitional CbCR Safe Harbour will be extended by one year. This proposed extension has retroactive effect to 1 January 2026 and applies to fiscal years beginning on or after that date. 

IFRS prescribes that current and deferred taxes are measured based on the tax rates and tax laws that have been “substantively enacted” by the end of the reporting period. Companies should consider the Pillar Two tax implications of the extension of the Transitional CbCR Safe Harbour in relation to the Netherlands for reporting periods ending on or after the date of substantively enactment. For MNE Groups that report based on calendar year, the extension effectively means that the Transitional CbCR Safe Harbour can also be considered in the Pillar Two provisioning for fiscal year 2027.

Side-by-Side Safe Harbour

The Side-by-Side Safe (“SbS”) Harbour — referred to in the legislative proposal as the Qualifying Equivalent Minimum Tax System Safe Harbour — is intended for multinational groups whose Ultimate Parent Entity is located in a jurisdiction with a qualifying domestic and worldwide minimum tax system. If this safe harbour is elected, the top-up tax under both:

• the Income Inclusion Rule (“IIR”); and 

• the Undertaxed Profits Rule (“UTPR”),

is deemed to be zero.

The SbS Safe Harbour has retroactive effect to 1 January 2026 and applies to fiscal years beginning on or after that date. 

Upon substantively enactment, companies should consider the Pillar Two tax implications of the SbS Safe Harbour in relation to the Netherlands for reporting periods ending on or after the date of substantively enactment.

We point out that the SbS Safe Harbour only turns off the application of the IIR and UTPR and that it does not affect the existing Qualified Domestic Minimum Top-up Taxes (“QDMTTs”) around the world. This means that MNE Groups that opt for the SbS Safe Harbour are still subject to local QDMTTs (e.g., the DMTA). Any current taxes resulting from the local QDMTTs need to be accounted for and separately disclosed in the financial statements. This does not hold for any (potential) deferred taxes resulting from QDMTTs due to the temporary mandatory exception for recognising and disclosing information about deferred taxes related to Pillar Two income taxes (IAS 12 paragraph 88A).

Simplified Effective Tax Rate Safe Harbour

The Simplified Effective Tax Rate Safe (“SETR”) Harbour allows multinational groups, subject to certain conditions, to avoid the full calculation under the Pillar Two rules. As with the Transitional CbCR Safe Harbour (and other safe harbours as introduced by the OECD), the SETR Safe Harbour deems the Top-up Tax in a jurisdiction to be zero when it applies. The SETR Safe Harbour has retroactive effect to 31 December 2025 and applies to fiscal years beginning on or after that date. 

Upon substantively enactment, companies should consider the Pillar Two tax implications of the SETR Safe Harbour in relation to the Netherlands for reporting periods ending on or after the date of substantively enactment. Given that this safe harbour has retroactive effect to 31 December 2025, MNE groups that report based on calendar year may need to consider the interaction of the Transitional CbCR Safe Harbour, SETR Safe Harbour and the full Pillar Two rules for fiscal years 2026 and 2027. 

While the SETR Safe Harbour seeks to incorporate key simplifications in a way that does not give rise to integrity concerns under the Pillar Two framework, the computation of the SETR remains complex. For example, the concept of GloBE-to-Book differences as introduced in the full Pillar Two computations also apply under the SETR Safe Harbour. This concept prescribes that deferred taxes for Pillar Two purposes must be determined based on the Pillar Two carrying value and tax base in cases where the Pillar Two carrying value diverges from the financial accounting carrying value. For IFRS purposes, the aforementioned does not change the amounts of DTAs and DTLs that are currently reported in the financial statements. For financial reporting purposes, deferred taxes related to temporary differences are still determined on the basis of the financial accounting carrying value vis-à-vis the tax base. For Pillar Two purposes, the deferred taxes are calculated on the basis of the Pillar Two carrying value vis-à-vis the tax base. Consequently, MNE Groups need to have a (separate) administration to keep track of their relevant deferred taxes for both financial accounting and Pillar Two purposes and this also holds under the SETR Safe Harbour.

The full Pillar Two computations include a DTL recapture rule to effectively exclude, from the computation of the Pillar Two taxes, certain DTLs that do not reverse within five years. Under the recapture rule, DTLs that are not reversed within five years from when they were originally recognised will result in a recomputation of prior years’ top-up taxes, excluding these deferred tax amounts from the computation of the Pillar Two taxes with retrospective effect. Because this will result in a relatively lower ETR, this recalculation could trigger an additional Pillar Two Top-up Tax in the year when the recalculation is undertaken. If a reporting entity expects that a DTL that is accrued will result in a Pillar Two Top-up Tax in a future year under the mechanics of the DTL Recapture Rule, a liability should be recognised for the estimated Pillar Two Top-up Tax payable in the financial statements. Consequently, the top-up tax liability should be initially classified as non-current (in line with IAS 1 paragraph 69, IFRS 18 paragraph 101). For additional details, please refer to FAQ9 of our global IFRS tax accounting FAQ on Pillar Two. 

One important difference between the full Pillar Two computations and the SETR Safe Harbour is that deferred tax expenses that would be in scope of the DTL Recapture Rule cannot be considered in the computation of the SETR in the year of accrual. This effectively means that the DTL Recapture Rule does not apply under the SETR Safe Harbour and hence no non-current liability should be recognised for these DTLs in the financial statements if the SETR Safe Harbour applies.

Pillar Two return to provisions

For calendar year reporters, the first GloBE Information Return (“GIR”) filing deadline of 30 June 2026 has passed. With the first filings now behind, MNE groups should consider any discrepancies between the final FY2024 GIR position and prior estimates of the FY2024 Pillar Two Top-up Tax amount. At the same time, it is also expected that some MNE groups may file an appeal against the FY2024 GIR due to certain positions taken in that return.

For financial reporting purposes, a Return-To-Provision (“RTP”) needs to be considered in case the Pillar Two Top-up Tax as reported in the GIR  differs from the amount previously estimated. These RTPs should be accounted for as a current tax, since no deferred taxes in relation to Pillar Two income taxes may be booked pursuant to the temporary mandatory exception as per IAS 12 paragraph 88A.  

In cases where an appeal is filed against the filing position, companies should also consider whether an Uncertain Tax Position needs to be accounted for in the financial statements in line with the requirements as set out under IFRIC 23.