Tax minister Marnix van Rij has submitted draft legislation to parliament which aims to ensure multinationals pay at least 15% tax.

The new law stems from an agreement reached between 138 countries in 2021 to set a minimum rate for international companies. All EU countries committed themselves to bringing in the tax at the end of last year.

The aim is to ensure companies with turnover of at least €750 million pay at least 15% tax. As a result, supporters hope companies will be discouraged from tax avoidance and there will be an end to the current race to the bottom when it comes to corporate taxes.

Van Rij estimates the tax will generate €400 million for the treasury every year.

“Tax evasion means that government spending is carried by people and companies who do pay their taxes,” he said. “This is unjust, given those who evade taxation do benefit from tax-funded facilities.”

Van Rij hopes the new law will come into effect at the end of 2023 although much remains unclear. Industry is, however, less opposed than it was before the legislation was put out to consultation.

“We back the concept of a minimum tax but it will only be effective if all countries do the same,” said Dirk-Jan Sinke, tax specialist with employers organisation VNO-NCW told the Financieele Dagblad.