Dutch Budget Day was 21 September, and since the Netherlands does not yet have a fully authorized new government (elections were held earlier this year), the 2022 proposals are limited in scope. As a result, the impact on multinational entities may not be significant. Also, since the current temporary government does not hold a majority in the second chamber, that entire chamber needs to individually vote on each proposal. Parties are not bound to a government agreement, so the second chamber may not agree upon all the proposals as presented. Furthermore, amendments are likely within the next few months.
To a large extent, the proposed changes included in the 2022 budget can be traced back to the European Commission’s continuing efforts for fair and transparent taxation. This means that some of the Dutch rules would be aligned with the anti-tax avoidance directives applicable to all EU member states. Also, the long-standing informal capital concept would align with rules applied in other large EU member states.
Action item: The key rules have been out for consultation and are not new, although some of the details may have changed. Although the impact on MNEs is not expected to be significant, MNEs still should follow the legislative process, and consider how the proposals’ could impact their operations.
