Netherlands: Status of proposal to increase corporate income tax rate to 25.8%

The proposal would have an effect on measurement of existing deferred tax assets and liabilities that are expected to reverse in FY 2022 and onwards.

The proposal would have an effect on the measurement of the existing deferred tax assets

The 2022 Tax Plan proposes to increase the “headline” corporate income tax rate from 25% to 25.8% for fiscal year (FY) 2022 and onwards. Read TaxNewsFlash

The proposal would have an effect on the measurement of the existing deferred tax assets and liabilities that are expected to reverse in FY 2022 and onwards. Deferred tax assets and liabilities would be measured at tax rates that would be expected to apply to the period in which the asset is realized or the liability is settled; thus, this implies that all deferred taxes on 31 December 2021 would need to be measured at 25.8% (instead of 25%).

If the final version of the 2022 Tax Plan is enacted in December 2021, the proposal would be expected to be effective 1 January 2022. There could be financial statement implications depending on the date of enactment.

Read a November 2021 report prepared by the KPMG member firm in the Netherlands

 

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