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  • ARTICLE - Netherlands

    Netherlands Windfall tax

    04 Nov


    On 1 November 2022, the Dutch State Secretary for Finance published a legislative proposal to introduce a temporary tax on windfall profits (the Windfall Tax).

    The proposal was submitted pursuant to Council Regulation (EU) 2022/1854, which provides for an emergency intervention in the event of extremely high energy prices.

    The Windfall Tax will apply to companies that have benefited from restructuring and privatisation of state-owned enterprises retroactively as of 1 January 2022.

    Scope of Netherlands Windfall Tax

    The Windfall Tax is levied on entities that:

    (i) are subject to Dutch corporate income tax; and

    (ii) in their financial year starting in 2022 obtain at least 75 percent of their net turnover from certain economic activities.

    It applies to activities conducted in the fields of natural gas extraction, mining, petroleum refining and manufacturing coke oven products. The Windfall Tax will assess profits made over 2022—regardless of when they were earned.

    How it works?

    The Windfall Tax is intended to be levied on excess profits, which are defined as the taxable profits of a company in 2022/the Contribution Year—to the extent that they exceed 120% of average taxable profit over four financial years preceding.

    The average taxable profits for the four previous years are not adjusted in any way (for example, there is no correction for lower taxable profits in prior years as a consequence of the Covid-19 pandemic; nor would inflation be taken into account).

    The excess profit is taxed at a rate of 33 per cent.

    Entities that are part of a fiscal unity can be treated as stand-alone entities for the calculations and mechanics above.

    The administrative burden of calculating every entity's stand-alone profits for the previous four years may be less than previously thought.

    However, the complexity may increase for taxpayers as they have to perform intra-fiscal unity transfer pricing analyses.

    How Netherlands Windfall Tax is collected?

    The Windfall Tax will be a self-assessed tax (‘aangiftebelasting’), which means that the taxpayer must file his or her own return to calculate how much tax is owed; this makes it similar in some ways to VAT but with greater flexibility because forms can be amended at any time.

    The return must be filed and the tax paid within seventeen months of the end of a contribution year.

    The calculations underlying the Windfall Tax depend on returns filed in 2022; as these are normally extended, 2018 CIT returns will be used instead.

    As a result, the statute of limitations for imposing additional Windfall Taxes is extended from five years to seven: it starts when the contribution year ends and runs until seven years after.

    Secondary liabilities

    To reduce the risk of tax recovery by the authorities, if a company is included within a fiscal unity that generated windfall profits during  the year in which contribution was due—and remains part of it for any portion or all of that fiscal unity until filing deadline —then other companies sharing this group at some point during those two periods are liable to pay unpaid contributions.

    If a taxpayer emigrates from the Netherlands, that person is still responsible for paying the Windfall Tax if any part of it remains outstanding—unless such person can prove (to Revenue's satisfaction) that he or she was not at fault for failing to pay all due amounts.

    In the context of CIT, secondary liabilities are those imposed on a company after its primary liability has been established.


    The proposal has been discussed in parliament, with little pushback on the issue of retroactivity. Much of the discussion focused around what aspects or entities would be subject to the Windfall Tax.

    The government did not engage with the other party's argument about excessive profits in other industries, noting only that these measures came from the European Commission.

    Several political parties queried how incidental profits and losses would be taken into account in calculating the ‘reference profit’ and ‘excess profit.’

    The Windfall Tax will be based on taxable profits for CIT purposes, and there will not be any specific rules/corrections for incidental profits or losses.

    The government acknowledged that taxpayers are free to challenge or appeal tax assessments if they disagree with them.

    Many questioned whether the Council had the authority to impose a tax without unanimous consent of all member states.

    The government indicated that Article 122 of the Treaty on European Union, which allows for certain decisions to be made by qualified majority instead of unanimity when necessary (such as in situations involving an energy crisis), justified these measures. The Netherlands is obliged to follow that directive under ECT Article 27(1) and Annex II-VI, Section I.

    If you have any queries about Netherlands Windfall Tax or Netherlands tax matters more generally, then please do not hesitate to get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article

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