This content is from: Netherlands

Netherlands: 2022 Dutch Tax Plan – few policies proposed

Rhys Bane and Jian-Cheng Ku of DLA Piper Netherlands provide an update on the 2022 Dutch Tax Plan.

On September 21 2021, the Dutch government put forward the 2022 Dutch Tax Plan to the Dutch House of Representatives (Tweede Kamer der Staten-Generaal). 

The Dutch government noted that the Tax Plan did not contain significant policy proposals, as the current government is defunct and a new government is currently being formed. 

The proposals included a proposal to change the moment of withholding of Dutch wage tax for the exercising of employee stock options for non-tradeable shares, a limitation to the amount of dividend withholding tax credits that can be utilised, the abolishment of unilateral downwards transfer pricing (TP) adjustments where there is no corresponding upward adjustment and the implementation of the last leg of the EU Anti-Tax Avoidance Directive II.

On November 11 2021, the Dutch government withdrew the employee stock option proposal and the Dutch House of Representatives voted on proposed amendments to the legislative proposals and the amended legislative proposals themselves. The legislative proposals were debated by the Dutch Senate (Eerste Kamer der Staten-Generaal) on December 13 and 14 2021, with the votes expected to take place on December 21 2021. It is expected that the legislative proposals will be passed by the Dutch Senate.

Utilisation of dividend withholding tax credits

Following a ruling from the Court of Justice of the European Union in a case against France on the discriminatory tax treatment of non-resident taxpayers in the utilisation of withholding tax credits, the Dutch government initially published a decree allowing non-resident taxpayers to obtain a refund of Dutch dividend withholding tax withheld on distributions to these non-resident taxpayers. 

The Dutch government proposes to change the rules for Dutch resident taxpayers to align the tax treatment of these taxpayers with the pre-decree treatment of non-resident taxpayers. This means that any withheld Dutch dividend withholding tax can be credited against Dutch corporate income tax payable only up to the amount of Dutch corporate income tax payable. This means if more Dutch dividend withholding tax was withheld than Dutch corporate income tax is payable, this no longer results in a refund. The non-utilised tax credits can be carried forward.

Unilateral downward TP adjustments

The Netherlands has traditionally allowed unilateral downward TP adjustments, without requiring a corresponding upward adjustment. Abolishing such unilateral downward TP adjustments was part of a package of anti-tax avoidance measures proposed by a government committee that investigated the taxation of multinational companies in the Netherlands. 

The proposal would see unilateral downwards TP adjustments limited to situations where the taxpayer can substantiate that there was also a corresponding adjustment on the other end of the transaction. 

The rules would also apply to distributions and contributions of assets where the state of the transferor does not tax the capital gain upon distribution or contribution, the result being that the assets will only be taken into account in the books of the Dutch taxpayer for the value it was given in the transaction (generally book value).

Following an amendment proposed in the Dutch House of Representatives, legal mergers and demergers, which fell outside of the scope of the original proposal, fall within the scope of the rules as well. 

Anti-hybrid rules

The Netherlands has already implemented the majority of the anti-hybrid rules that EU member states have to implemented under the EU Anti-Tax Avoidance Directive II (the ATAD II Directive). The ATAD II Directive requires EU member states to implement the so-called ‘reverse hybrid taxpayer rule’ as of January 1 2022. 

The legislative proposal implements this reverse hybrid taxpayer rule and introduces additional measures in other legislation, such as the Dutch Conditional Withholding Tax Act and the Dutch Dividend Withholding Tax Act, in order to prevent new tax planning possibilities. 

Under the proposal, reverse hybrid entities will become fully liable to tax in the Netherlands, with a deduction for income that is taxed in the hands of the participants of the reverse hybrid entity. Entities that may be impacted by these rules are entities that are residents of the Netherlands, but also entities that were established under Dutch law (and are no longer Dutch residents). 


Although the 2022 Dutch Tax Plan is not full of policy proposals, it does contain several policy choices that could have been different. In particular, the full utilisation of Dutch dividend withholding tax credits for non-resident taxpayers could have been kept and the Dutch government could have waited with the unilateral downward TP adjustment rules until the development of the OECD’s pillar two. 

Jian-Cheng Ku 
Partner, DLA Piper

Rhys Bane 
Associate, DLA Piper

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