Netherlands proposes new Pillar Two safe harbours in its 2027 Tax Plan

On 15 September 2026, the Dutch government presented a bill that would introduce four new Pillar Two safe harbours, extend the Transitional Country-by-Country Reporting Safe Harbour and amend the treatment of certain 52- and 53-week accounting periods. This forms part of the 2027 Tax Plan, although several provisions would apply retrospectively to fiscal years beginning in late 2025 or in 2026. 

The proposal would implement the OECD Inclusive Framework’s January 2026 Side-by-Side package in the Dutch Minimum Tax Act (Wet minimumbelasting 2024 – WMB 2024). 

A permanent Simplified ETR Safe Harbour

Proposed Article 8.11 would allow the filing constituent entity to elect for top-up tax in a tested jurisdiction to be treated as nil where the simplified effective tax rate is at least 15%, or the jurisdiction has a simplified loss. The rate is calculated by dividing simplified taxes by simplified income. The tested jurisdiction encompasses the entities for which a separate ETR calculation is required, rather than necessarily combining every group entity located in the same country. The provision expressly addresses permanent establishments, joint ventures and joint venture affiliates.

The starting point is the financial accounting standard used for the ultimate parent entity’s (UPE’s) consolidated financial statements, with prescribed adjustments. Where a qualified domestic minimum top-up tax (QDMTT) uses local accounting standards, the draft generally follows that basis, subject to an exception allowing the UPE standard where the jurisdiction permits it and the group makes the required consistent election. The Netherlands would expressly permit that choice for a Dutch tested jurisdiction. 

The simplified computation still requires technical analysis. Proposed Articles 8.11a–8.11h address income adjustments, deferred taxes, negative tax amounts, post-year-end adjustments, transfer pricing, asset transfers, cross-border allocations and particular entity types. There are also exclusions and entry and re-entry conditions. In particular, Article 8.11h tests whether top-up tax was due in fiscal years beginning within specified 24-month periods. 

The explanatory memorandum also endorses four integrity principles: matching, full allocation, single expense and loss, and single tax. Although the government does not propose to codify them individually, it states that they must be observed when applying the safe harbour. 

Early application 

The general OECD commencement point described in the memorandum is fiscal years beginning on or after 31 December 2026. The Netherlands would exercise the option to permit earlier application from 31 December 2025. However, proposed Article 8.11(9) makes access during the early-application period conditional on one of three circumstances:

-The tested jurisdiction benefits from the QDMTT Safe Harbour.

-No more than one jurisdiction is entitled to impose top-up tax in respect of the tested jurisdiction.

-Every jurisdiction entitled to impose that top-up tax permits early application, and the multinational group elects to apply the safe harbour in all of them.

The memorandum confirms that these conditions were omitted from the public consultation draft and have been included in the submitted bill. A Dutch election alone would therefore be insufficient where more than one jurisdiction has taxing rights and the QDMTT Safe Harbour condition is unavailable. 

Separate relief for equivalent tax systems and UPE jurisdictions

Proposed Article 8.15 implements the Side-by-Side Safe Harbour for a multinational group whose ultimate parent entity is located in a jurisdiction with a qualifying equivalent minimum tax system. On election, the relevant top-up tax is treated as nil for the Dutch income inclusion rule (IIR) and undertaxed profits rule (UTPR). The provision also extends to relevant interests in joint ventures and their affiliates. It does not switch off the QDMTT. 

Qualification requires both a qualifying domestic tax system and a qualifying worldwide tax system, together with a mechanism for crediting foreign profit taxes, including QDMTTs. The domestic criteria include a statutory profit-tax rate of at least 20%, a qualifying domestic top-up tax or alternative minimum tax of at least 15% covering a substantial share of domestic profits, and a test addressing the material risk of taxation below 15%. The worldwide criteria address foreign income coverage, anti-BEPS protections and the risk of low taxation of foreign profits. 

Those criteria are part of the draft statute. The memorandum explains that the Inclusive Framework assesses qualifying systems and records its conclusions in the OECD Central Record. 

Proposed Article 8.16 provides a narrower UPE Safe Harbour. It would set UTPR top-up tax to nil for low-taxed constituent entities located in the UPE jurisdiction where a qualifying domestic tax system was in force and applicable there on 1 January 2026. It does not provide the broader IIR relief available under Article 8.15, and QDMTT remains unaffected. 

The government expressly states that it does not intend to seek recognition of the Netherlands under either of these safe harbours. Its position is that the existing Dutch implementation of the QDMTT, IIR and UTPR already provides the required minimum-tax framework. Enacting the safe harbours would therefore recognise qualifying foreign systems without, by itself, giving Dutch-parented groups equivalent-system status.

Substance-based relief for qualifying tax incentives