Large multinational corporations are obligated to disclose their profit tax contributions per state. An EU Directive was implemented in the Netherlands, regarding disclosure of income tax information by certain undertakings and branches.
As we near the end of the first reporting periods, our experts discuss the new legislation and the key components of the Public Country-by-Country Report in the Netherlands.
Companies in Scope
Public CbCR is the product of EU legislation, which requires Member States to incorporate it into their domestic laws. In the Netherlands, the relevant Decree was issued in 2024. It distinguishes two categories of companies that fall within the scope of Public CbCR:
Companies that are the ultimate parent entity of a group with a total consolidated revenue exceeding € 750 million in two consecutive years. This includes the Public Limited Company (nv), Private Limited Liability Company (bv), the General Partnership (vof) and the Limited Partnership (cv);
Stand-alone companies that meet the same € 750 million revenue threshold for two consecutive years.
This legislation applies to all mid-sized and large companies and qualifying businesses in the Netherlands. The size is determined based on accounting rules, as explained here. Shortly put, the total assets, revenue and personnel (FTE) define the size.
Dutch legislation offers limited exemptions. Based on the Dutch Decree, the following entities are not subject to Public CbCR requirements in the Netherlands:
Parent companies of groups that operate exclusively in the Netherlands;
Single entities with branches, permanent establishments or permanent business activities solely in the Netherlands; and
Banks and investment firms.
Our Transfer Pricing experts would be happy to help you establish whether your group or your company is subject to the Public CbCR rules in the Netherlands.
Dutch Public CbCR data
Entities subject to Public CbCR in the Netherlands are obliged to file an annual report. This report should contain the following information, provided separately for each EU member state and any jurisdiction identified by the EU as a non-cooperative:
a) Name of the Ultimate Parent Company or of the stand-alone company;
b) Financial year in question;
c) Currency used;
d) List of subsidiaries established in the EU (or in countries included on the EU black/grey list);
e) Description of the activities of the parent company;
f) Number of employees;
g) Income;
h) Profit and Loss before taxes;
i) Attributable profit tax;
j) Profit tax paid;
k) Accumulated profit.
This list, however, does not prevent companies from offering additional information. Given the circumstances, it may for example be beneficial to provide the company's interpretation of the disclosed data, particularly to prevent potential misinterpretation. Read more about potential pitfalls of transparency here.
We note that certain sensitive data may be withheld from the report if it meets certain conditions. Our advisors can explain the exceptional circumstances under which this is possible.
Deadlines for submission
The obligation to publish the Public CbCR applies to financial years starting on or after 22 June 2024. The report must be made publicly available within twelve months after the end of the financial year. We advise businesses within scope of this legislation to assess their obligations and prepare for the reporting on time.
In the Netherlands, companies must file this report with the Dutch Chamber of Commerce, publish it on their website and ensure that the report remains accessible on the website for at least five years after publication.
Prepare for the first reporting period now
Failure to comply with this legislation is considered an economic offence and is punishable by significant fines or even prison sentences. Additionally, drafting your PCbCR may entail more than just tallying the numbers. You may wish to add further nuance in your external communications, too. And in composing your PCbCR, new opportunities for streamlining and optimisation may arise.
Our Transfer Pricing experts would be happy to discuss how your business should prepare for these obligations. If you have any questions or require any support, please do not hesitate to contact us.
The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.
