Netherlands: Policy decree on application of Pillar Two Minimum Tax Act

The Dutch Ministry of Finance on September 25, 2026, issued a policy decree collating previously published positions from the Dutch tax administration’s Pillar Two knowledge group on the application of the Minimum Tax Act 2024. The Minimum Tax Act 2024 implements the Pillar Two global minimum tax rules in the Netherlands.

The decree provides guidance on several key areas, including:

• Treatment of certain types of entities, including Dutch limited partnerships and comparable legal arrangements that prepare separate financial information used for consolidation purposes
• Identification of excluded entities, including government entities and non-profit organizations, as well as ownership conditions for entities held by governments, non-profit organizations, and other excluded entities
• Treatment of flow-through entities, including partially transparent entities, reverse hybrid entities, and the interaction with the entity-classification rules under Dutch corporate income tax law
• Permanent establishments, particularly whether passively leased real estate located in another jurisdiction constitutes a permanent establishment for minimum tax purposes
• Application of the income inclusion rule (IIR) following acquisitions, disposals, and intra-group transfers of low-taxed constituent entities during a fiscal year
• Taxes qualifying as covered taxes, including the treatment of certain taxes applicable in the Caribbean Netherlands and levies relating to the exploitation of natural resources
• Application of the anti-hybrid arbitrage rules under the transitional CbC reporting safe harbor, including the treatment of intra-group financing arrangements within a Dutch fiscal unity
• Application of the qualifying domestic minimum top-up tax (QDMTT) when a Dutch constituent entity has an incidental reporting period that differs from the fiscal year of the ultimate parent entity’s (UPE) consolidated financial statements as a result of a merger, liquidation, or incorporation of a group entity

Read an October 2026 report prepared by KPMG’s EU Tax Centre