In more detail
With this announcement, the Netherlands became the second European jurisdiction to issue guidance on the application of Amount B, following Ireland.
The decree is a brief two-page document that summarizes the international agreement of the Inclusive Framework on Pillar One Amount B and its implications in the Netherlands. Below we summarize the main features of the Amount B Decree 2025:
- Amount B will not be introduced for Dutch taxpayers conducting activities in the Netherlands that are in scope for Amount B (i.e., baseline marketing and distribution activities).
- However, the Netherlands commits to accepting the outcomes of Amount B as applied by entities performing baseline marketing and distribution activities in a "covered jurisdiction" with a bilateral tax treaty concluded with the Netherlands. This would, therefore, currently concern 29 countries.1
- The wording of the Amount B Decree confirms that, from a Dutch perspective, the existing bilateral tax treaties with covered jurisdictions would be sufficient to effectuate the commitments under this decree. In other words, adoption of the Model Competent Authority Agreement on Amount B (MCAA) would not be necessary from a Dutch perspective when a double tax treaty is in place.
- In effect, such commitment implies that when Amount B is applied by taxpayers located in the respective covered jurisdictions with which the Netherlands has a double tax treaty, in a manner that adheres to the guidance provided in the Annex to Chapter IV of the OECD Guidelines, the Netherlands will take steps to prevent or eliminate double taxation by:
- Applying unilateral corresponding adjustments for Dutch taxpayers to reflect the outcomes of Amount B, as applied by foreign entities engaged in routine marketing and distribution activities.
- Engaging in consultation procedures (e.g., Mutual Agreement Procedure) regarding the application of Amount B by a covered jurisdiction and accepting the Amount B outcome if Amount B is adopted by such covered jurisdiction.
- Committing not to impose adjustments related to the remuneration of routine marketing and distribution activities in such covered jurisdiction, provided that there is a proper application of Amount B.
- The Amount B Decree 2025 applies to qualifying transactions between separate legal entities and also for determining the allocation of profits to permanent establishments.
- The Amount B Decree 2025 will take effect on 1 January 2025, which aligns with the timeline set by the OECD.
1 The Netherlands currently has bilateral tax treaties in force with the following covered jurisdictions: Albania, Argentina, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Brazil, Egypt, Georgia, Jordan, Kazakhstan, Malaysia, Mexico, Moldova, Montenegro, Morocco, Nigeria, North Macedonia, Pakistan, Philippines, Serbia, South Africa, Sri Lanka, Thailand, Tunisia, Ukraine, Uzbekistan, Viet Nam, and Zambia.
