On 6 July 2023, the Dutch House of Representatives passed legislation aimed at implementing the Public Country-by-Country (CbC) Reporting Directive. This move highlights the Netherlands’ commitment to transparency and aligns with international efforts to enhance corporate tax disclosure. Key takeaways from the newly adopted legislation are as follows:
- Alignment with Directive: The provisions of the Dutch public CbC bill closely align with the text of the Directive. This alignment ensures that the Netherlands is in step with broader European and global initiatives in this area.
- Safeguard Clause: The bill includes provisions for applying the “safeguard clause.” This clause is designed to offer flexibility in certain circumstances, allowing companies to address specific concerns while still adhering to reporting requirements.
- Publication Requirement: Under the legislation, companies will be obliged to publish their CbC reports on their official websites. The Netherlands intends to make these reports publicly available, in contrast to some jurisdictions where an exemption from publication is granted if the reports are accessible free of charge on the local commercial registry’s website.
- Revenue Threshold: Notably, the Dutch draft legislation does not explicitly mention the two-year revenue threshold. Instead, it appears to follow the existing OECD approach, which considers group revenues exceeding EUR 750 million in the year preceding the year for which the country report needs to be filed.
The next step in the legislative process will involve the presentation of the draft legislation to the Senate on 12 September 2023. If the Senate approves the bill, it is expected that the public disclosure rules will come into effect for financial years commencing on or after 22 June 2024.
This legislative move signals the Netherlands’ commitment to transparency and cooperation in the global effort to combat tax evasion and ensure that multinational corporations are held accountable for their tax practices. As the deadline for implementation approaches, companies operating within the Netherlands will need to prepare for enhanced CbC reporting requirements and greater scrutiny of their financial activities.
