Netherlands: Proposal to mitigate interest on underpaid tax when MAP conducted
Proposed to be effective January 1, 2027
A draft of the Tax Collection Act 2027, which was published for consultation on August 18, 2025, would provide an explicit option to mitigate interest on underpaid tax when a mutual agreement procedure (MAP) is conducted, effective January 1, 2027.
KPMG observation
The proposed interest mitigation only applies to MAPs and does not appear to apply to advance certainty in the form of bilateral advance pricing agreements (BAPAs), even though both BAPAs and MAPs aim to prevent double taxation. The difference presumably is based on the fact that BAPAs are initiated in advance, and thus there is, in theory, no need for mitigation of interest on underpaid tax. However, because of long processing times, BAPAs often also provide retroactive certainty, and the proposed interest mitigation does not reflect that reality.
Read a September 2025 report prepared by the KPMG member firm in the Netherlands