(Inter)national developments in tax legislation
An (inter)national trend is the increasing call for more transparency leading to new and additional compliance requirements. In this light, we monitor new (tax) legislation and initiatives thoroughly, both in the context of tax transparency and tax reporting.
Complying with the legislation in the countries in which we operate, we have filed a country-by-country report (CbCR) in the Netherlands and CbCR notifications in other countries to the extent required.
In 2024, (inter)national developments were discussed to assess whether our stance towards these developments should be adjusted. We continue to strive for optimal tax transparency. In the next paragraphs, we will provide a short summary of those (fairly) new tax developments that will have an impact for PostNL in 2024 and the near future in terms of tax compliance. In 2023, we discussed DAC 7 and CBAM in this section. We consider the impact of DAC 7 and CBAM as non material in this respect.
Pillar Two
In the European Union, Council Directive 2022/2523 was adopted in December 2022 on ensuring an overall minimum level of taxation for multinational enterprise groups and large domestic groups in the EU. The Directive had to be transposed into domestic laws by 31 December 2023 and was entering into force on 1 January 2024. The Directive implements at EU level the Pillar Two rules of the OECD's Inclusive Framework on base erosion and profit shifting. Pillar Two applies to multinational groups with a turnover of more than EUR 750 million and entails a minimum tax of 15% calculated on adjusted accounting profit on a jurisdiction-by-jurisdiction basis. In 2023 and 2024, the OECD has provided further guidance to these rules by approving administrative guidance and a report on safe harbours in order to simplify their application.
In the Netherlands, on 30 May 2023 the preliminary draft law transposing the European Directive establishing a minimum overall tax level of 15% for multinational companies and large domestic groups was published. The law has been approved on 19 December 2023 and has entered into force on 31 December 2023. Pillar Two legislation has also been enacted or is in the process of being enacted in almost all countries in which PostNL is active. PostNL is in scope of this legislation and has performed an assessment of its potential exposure to Pillar Two income taxes taking into consideration the transitory safe harbours. Based on the final legislation in the Netherlands, PostNL NV is the ultimate parent entity (UPE) liable to pay the additional tax due for those subsidiaries located in jurisdictions below the minimum effective tax rate of 15%. PostNL Group entities will also be subject to tax in those countries where a domestic global minimum tax is approved according to the Pillar Two rules. The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country reporting and (aggregated on a country basis) financial information for the PostNL Group entities. Based on this assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the PostNL Group operates are above 15% or one of the other safe harbours are met. Consequently, PostNL does not estimate a significant impact derived from this new regulation (e.g. top-up tax payable).
For more information regarding Pillar Two, please see the Income tax note in the Financial statements section of this report, which specifies the (expected) impact of Pillar Two for PostNL in terms of top-up tax payments.
Public EU Country-by-Country Reporting (EU CbCR)
On 6 July 2023, the Netherlands passed legislation to implement public country-by-country reporting under EU directive (EU) 2021/2101. Based on this new legislation, PostNL is required to publicly disclose a CbCR, which includes tax and tax-related information for financial years starting on or after 22 June 2024. This means that formally we are obliged to report this information as of FY 2025. However, PostNL has included most this CbCR information in its annual report since 2022. This underlines the adherence to our policy provisions as regards tax transparency and reporting.