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Netherlands Budget Day 2022: Impact of tax proposals on multinational enterprises

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The Dutch Ministry of Finance presented its 2022 budget to the Dutch parliament on September 21 2021

Jian-Cheng Ku and Tim Mulder of DLA Piper discuss the most relevant tax proposals announced in the Netherlands 2022 budget that are relevant for multinational enterprises with activities in the Netherlands.

The Dutch Ministry of Finance presented its 2022 budget to the Dutch parliament on September 21 2021. Part of the budget are the draft tax proposals for 2022 and onwards. The draft tax proposals will be discussed by the parliament within the next months. If enacted, the tax proposals are expected to enter into force on January 1 2022.

Employee stock option rules

To provide more flexibility to companies offering employees stock options, a deferral of taxation will be proposed. The taxable amount of the stock options is the fair market value at the moment of taxation. 

The tax proposal provides more flexibility for the moment of taxation. The moment of taxation will be the moment that the option right is exercised, the underlying shares become tradable or when the option is sold. 

Taxation of reverse hybrid entities

In line with the Dutch implementation of the EU Anti-Tax Avoidance Directive 2, certain reverse hybrid entities will become Dutch corporate income taxpayers as per January 1 2022. 

These rules apply to reverse hybrid entities that are incorporated or established under Dutch law and is treated transparent from a Dutch tax perspective while from the perspective of its participants holding at least 50% of the voting or profit rights, the entity is treated opaque. For certain investment funds an exemption may apply.

It is anticipated that on January 1 2022, the reverse hybrid entity should prepare a tax balance sheet and value its assets and liabilities at fair market value. In case the reverse hybrid entity has participants treating the entity as transparent, the results attributable to these participants will be deducted from the entity’s Dutch tax base.

Elimination of double non-taxation through TP

In March 2021 the Dutch Ministry of Finance published an internet consultation for its legislative proposal to eliminate double non-taxation under the Dutch arm’s-length principle. This proposal included three types of measures against a downward profit adjustment for Dutch tax purposes in case of no corresponding taxable upward adjustment at the level of the related party.

The legislative proposal to eliminate these transfer pricing (TP) matches are part of the of the Budget Day Tax Proposals. The measures should become effective for fiscal years starting on or after January 1 2022. There will be no retroactive effect, except for business assets that are acquired in financial years starting on or after July 1 2019 and before January 1 2022. If these assets are acquired against a book value lower than its fair market value, amortisation of these assets might be restricted as of January 1 2022.

Other announced changes

As per January 1 2021, the lower bracket of the corporate income tax rate of 15% will increase from €245,000 in 2021 to €395,000 in 2022. 

As per January 1 2021, the loss compensation rules will be amended. These changes were already part of the 2021 Budget Day Tax Proposals. As a result, losses can be carried forward indefinitely, but the offset will be restricted to 50% of the annual profits in excess of a €1 million threshold.

The announced changes regarding the Dutch tax qualification of partnerships will likely postponed until the winter of 2021–2022.


Contrary to the last couple of years the number of tax proposals affecting multinational enterprises is limited. Furthermore, proposals regarding reverse hybrid entities and the elimination of double non-taxation through transfer pricing were already announced earlier this year.

The tax proposals are currently discussed in Dutch parliament and subsequently might be amended. In case the proposals are adopted by the parliament, the tax proposals will be enacted into law by the end of this year and become effective as per January 1 2022. 


Jian-Cheng Ku

Partner, DLA Piper


Tim Mulder

Senior associate, DLA Piper



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