Netherlands: Guidance on how Pillar One Amount B will affect domestic taxpayers

The Deputy Minister of Finance on December 4, 2024, published a decree on Amount B under Pillar One, describing how Amount B will affect taxpayers in the Netherlands. 

The decree states that:

• Amount B rules will not apply to baseline marketing and distribution activities in the Netherlands. However, the Netherlands commits to accepting the outcome of applying Amount B to baseline marketing and distribution activities in covered jurisdictions.
• The Netherlands will provide a corresponding adjustment to transfer prices as relief for double taxation if (1) the covered jurisdiction has implemented Amount B in local laws and regulations, (2) has correctly applied Amount B, and (3) has a bilateral tax treaty with the Netherlands.
• The Netherlands will apply Amount B to both affiliated legal entities and to the profit allocation to permanent establishments (PEs), even though the OECD Amount B guidance has not clarified the applicability to PEs.

The decree also notes that Amount B could play a role in the levying of corporate income tax on Dutch taxpayers in a number of situations.

The decree becomes effective January 1, 2025.

KPMG observation

While the decree aims at providing certainty for baseline marketing and distribution activities in the Netherlands involving transactions with covered jurisdictions, various challenges could remain with regard to matters not specifically covered in the decree, including for example what qualifies as the “correct application of Amount B” for the Dutch tax authorities to accept the Amount B calculations in a covered jurisdiction.

Read a December 2024 report prepared by the KPMG member firm in the Netherlands