Dutch Tax Administration Clarifies the Treatment of Joint Ventures Under the Dutch Minimum Tax Act 2024

On 9 and 10 April 2026, the Dutch Tax Administration’s Pillar Two Knowledge Group published two administrative positions on the treatment of joint ventures under the Dutch Minimum Tax Act 2024.

The first publication, KG:911:2026:2, addresses when an entity qualifies as a joint venture under article 1.2 of the Dutch Minimum Tax Act 2024. The second publication, KG:911:2026:3, addresses whether the Act’s location rule and the five-year transitional rule for the under-taxed profits rule apply when calculating top-up tax for a joint venture group.

A Pillar Two joint venture is a statutory category that brings certain equity-accounted entities, and their controlled subsidiaries or permanent establishments, into the Dutch Global Anti-Base Erosion computation through a special separate-group mechanism. Article 9.4 of the Dutch Minimum Tax Act 2024 requires a parent entity holding a direct or indirect interest in a joint venture or joint venture group to apply the income inclusion rule to its allocable share of the top-up tax of the joint venture group. It also provides that the joint venture and its related parties are treated, for top-up tax computation purposes, as if they were constituent entities of a separate multinational group or domestic group whose ultimate parent entity is the joint venture.

The Pillar Two Knowledge Group reaches five practical conclusions:

First, fair-value accounting does not satisfy the statutory joint venture definition; equity-method accounting is required.

Second, an entity in which the ultimate parent entity holds a 100 percent interest can, in principle, still qualify as a joint venture if the other statutory conditions are met.

Third, the 50 percent ownership-interest test is applied from the moment the ultimate parent entity acquires the relevant interest and thereafter on a continuing basis.

Fourth, article 1.3 of the Dutch Minimum Tax Act 2024 applies to determine the location of the joint venture and its related parties when computing joint venture group top-up tax.

Fifth, article 14.2(5), the temporary nil rule for the under-taxed profits rule during the initial phase of international activity, is not relevant to the calculation of joint venture group top-up tax itself.

Dutch legislation and OECD framework

Article 1.2 of the Dutch Minimum Tax Act 2024 defines a joint venture as an entity whose financial results are accounted for using the equity method in the consolidated financial statements of an ultimate parent entity, provided that the ultimate parent entity directly or indirectly holds at least 50 percent of the interest in that entity. The definition excludes, among other categories, certain ultimate parent entities, excluded entities, entities held through excluded entities in specified circumstances, entities held by groups composed exclusively of excluded entities, and entities that are related parties of a joint venture. It also defines a joint venture group as a joint venture together with one or more related parties of that joint venture.

Article 9.4 is the operative Dutch rule. It provides that a parent entity with a direct or indirect interest in a joint venture or joint venture group applies the income inclusion rule to its allocable share of the top-up tax of each member of that joint venture group. It further provides that the top-up tax of the joint venture and its related parties is computed as if those entities were constituent entities of a separate multinational group or domestic group, with the joint venture treated as the ultimate parent entity of that separate group. Any remaining joint venture group top-up tax not charged under the income inclusion rule is added to the total under-taxed profits top-up tax amount.

The Dutch provisions broadly follow the OECD provisions. OECD Model Rule article 10.1 defines a joint venture as an entity whose financial results are reported under the equity method in the consolidated financial statements of the ultimate parent entity, provided that the ultimate parent entity directly or indirectly holds at least 50 percent of the ownership interests. OECD Model Rule article 6.4 then applies the GloBE rules to a joint venture and its subsidiaries by computing their top-up tax as if they were constituent entities of a separate multinational group and as if the joint venture were the ultimate parent entity of that group.

The OECD Commentary explains the policy reason for this special rule. Equity-accounted joint ventures are not consolidated line by line with their owners. Without a special rule, they would fall outside the ordinary constituent-entity definition.

Publication KG:911:2026:2 — the joint venture definition

Fair-value accounting is not sufficient

The first question considered by the Pillar Two Knowledge Group was whether an entity whose financial results are accounted for at fair value in the consolidated financial statements of the ultimate parent entity can qualify as a joint venture under article 1.2 of the Dutch Minimum Tax Act 2024. The answer is no. The Knowledge Group states that qualification as a joint venture requires the entity’s financial results to be accounted for using the equity method in the consolidated financial statements of the ultimate parent entity. Fair-value accounting is not consistent with that requirement, even if a financial reporting standard permits fair-value accounting for joint ventures in particular circumstances.

This is a strict accounting-method conclusion. The relevant question is not whether the entity is commercially described as a joint venture, whether there is shared governance, or whether the entity would be regarded as a joint venture under a financial reporting standard in a broader sense. The statutory trigger is whether the entity’s financial results are reported under the equity method in the ultimate parent entity’s consolidated financial statements. That approach is consistent with OECD Model Rule article 10.1 and article 36 of the EU directive, both of which make equity-method reporting central to the joint venture definition.

This conclusion is particularly relevant for investment platforms, infrastructure structures, private equity arrangements, sovereign-investor structures, and other structures in which fair-value measurement is common. A fair-value-reported investment may still be relevant for other aspects of the Pillar Two analysis, but it will not be a joint venture under article 1.2 of the Dutch Minimum Tax Act 2024 merely because it is legally or commercially labelled as one. 

A 100 percent interest can still qualify

The second question was whether an entity can qualify as a joint venture where the ultimate parent entity directly or indirectly holds a 100 percent interest in that entity. The Knowledge Group answers yes, provided the other statutory conditions are met. It recognises that a 100 percent interest is not a joint venture in the usual commercial sense, but concludes that the statutory test can still be satisfied because the ownership threshold is “at least 50 percent.”

The reasoning is textual and purposive. Textually, the Dutch Act does not say that the ultimate parent entity must hold between 50 percent and less than 100 percent. It requires an interest of at least 50 percent. The Knowledge Group also points to the statutory concept of an ownership interest as an interest giving rights to profits, capital or reserves; control rights are not part of that definition. The joint venture rules are intended to address the fact that an equity-accounted entity is not line-by-line consolidated and could otherwise fall outside the normal scope of the GloBE rules. That issue can arise even where the ultimate parent entity economically owns 100 percent of the entity, provided the entity is equity-accounted and the other statutory conditions are met.

The OECD Commentary discusses the rule in the context of joint ventures with other parties and refers to ventures in which the multinational group holds 50 percent or more of the ownership interests without unilateral control. However, the Dutch Knowledge Group’s conclusion is that the Dutch statutory definition is not limited to conventional jointly controlled arrangements where another investor holds an economic stake.

The practical consequence is that advisers should not automatically exclude wholly owned, equity-accounted entities from the joint venture workstream. Conversely, a 100 percent interest is not enough by itself. The entity must still be accounted for under the equity method in the ultimate parent entity’s consolidated financial statements and must not fall within any of the statutory exclusions in article 1.2. In many cases, the accounting conclusion will be the key issue, because a wholly owned entity would ordinarily be line-by-line consolidated unless specific accounting facts point in another direction.

The 50 percent test is applied continuously