Tax Administration clarified that tax expenses or benefits tied to pre-Pillar 2 income were required to be corrected under the Minimum Tax Act 2024, even if they were recognised after the law came into effect.
The Dutch Tax Administration has confirmed that corporate income tax expenses or benefits relating to pre-Pillar Two financial years must be corrected when calculating adjusted covered taxes under the Minimum Tax Act 2024 (Wet minimumbelasting 2024; WMB 2024), even if those amounts are recognised after the law entered into force. The clarification was published on 11 December 2025.
The guidance addresses situations where income from financial years beginning before the WMB 2024 is excluded from the calculation of qualifying GloBE income or loss under Chapter 6 of the Act. Under Article 7.2(3)(a) WMB 2024, any tax expense or tax benefit connected to such excluded income must also be excluded from adjusted covered taxes, regardless of the year in which it is recognised in the financial statements.
The position is illustrated in administrative guidance KG:911:2025:3, which examines a Dutch group entity that adjusted its view in 2024 on income reported in its 2021 corporate income tax return. Following court rulings, the entity recognised a tax benefit in 2024 by reversing a current tax expense previously recorded for 2021. The Tax Administration confirmed that this tax benefit must be corrected under Article 7.2(1)(a), in conjunction with Article 7.2(3)(a) WMB 2024, because it relates to income from a pre-Pillar 2 financial year that does not form part of qualifying income.
According to the Tax Administration, Article 7.2 WMB 2024 aims to ensure symmetry between qualifying income (the denominator) and adjusted covered taxes (the numerator). Tax expenses are taken into account only to the extent that they relate to qualifying income or loss. Income components from financial years that commenced before the entry into force of the WMB 2024 are excluded from qualifying income, and the related tax expenses or benefits must therefore be corrected when determining adjusted covered taxes.
The Dutch interpretation aligns with the OECD Global Anti-Base Erosion (GloBE) Model Rules and Commentary. Article 7.2(3)(a) WMB 2024 corresponds to Article 4.1(a) of the OECD Model Rules, which refers to tax relating to income excluded from the computation of GloBE Income or Loss. The Tax Administration relies on OECD Commentary indicating that this concept should be interpreted broadly and includes items that are not part of qualifying income because they are a priori excluded, such as income from pre-Pillar 2 financial years.
The Tax Administration concluded that the tax benefit recognised in 2024, although accounted for as a negative tax expense, must be corrected because it relates to income excluded from qualifying income under Chapter 6 WMB 2024. This approach is consistent with both the literal wording of the Dutch legislation and the OECD’s interpretation of excluded items under the GloBE framework.
