Netherlands: Foreign digital services tax modeled on EU proposal is deductible
The guidance concludes that a digital services tax imposed on gross revenue is not a tax on income or profits for Dutch corporate income tax purposes.
The Dutch Tax Administration on July 7, 2026, published guidance clarifying that a foreign digital services tax (DST) modeled on the 2018 proposal of the European Commission (EC) is deductible for Dutch corporate income tax purposes.
The tax administration concluded that a foreign DST designed in accordance with the 2018 proposal of the European Commission (EC) is not a tax on income or profits because it is levied on gross revenue rather than net profits.
The guidance further notes that the deductibility analysis may differ for DSTs implemented under the rules of other jurisdictions. The conclusion therefore applies specifically to a digital services tax modeled on the 2018 proposal of the European Commission (EC).
For more information, contact a KPMG tax professional in the Netherlands:
Paul Te Boekhorst | teboekhorst.paul@kpmg.com