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In brief

On 18 July 2023, the Dutch government published draft legislation to implement the EU’s Corporate Sustainability Reporting Directive (CSRD), which was adopted on 14 December 2022 by the EU. The government has invited stakeholders and other interested parties to provide feedback on the draft bill before 10 September 2023. The draft bill requires certain companies to report on sustainability issues and addresses the audit requirements for auditors and accounting firms for the corporate sustainability report. It also expands the reporting obligations for listed companies.

In more detail

The CSRD will overhaul the current sustainability reporting landscape for all multinational companies with significant activities in the EU, including those headquartered outside the EU. The reporting obligations of the CSRD will progressively come into force between 2024 and 2028.

Companies in scope will be expected to report – not only qualitative but also quantitative – information on cross-cutting sustainability issues.

Who must report?

In line with the Directive, a company in scope of the reporting requirement is:

  1. large public or private limited company (NV or BV), or a partnership (VOF) or limited partnership (CV) if all partners are individually liable for debts, or companies with share capital, incorporated under foreign law.
  2. A listed company (unless the listed company is, considering the size and value of its balance sheet and revenue defined as a listed micro company).
  3. Large organizations of public interest.
  4. Companies or organizations of public interest that are the head of a large group. (“reporting company(ies)”).

A company or organization of public interest is considered large if it meets two out of the following three conditions:

  1. The total value of its balance sheet exceeds EUR 20 million
  2. The total net revenue exceeds EUR 40 million
  3. It has more than 250 employees

What must be reported?

The sustainability information that reporting companies must report on will be qualified in another regulation, which will also be subject to a consultation. The sustainability report must be included in the directors’ report. A reporting company in scope that currently applies the exemption under art. 2:394(4) of the Dutch Civil Code, and therefore does not currently publicly submit its directors’ report to the commercial register, will no longer be exempted from this disclosure requirement. 

Furthermore, the Netherlands has adopted the option under the CSRD to require the reporting company to publish its directors’ report on its own website – free of charge and publicly available. In case the reporting company does not have its own website, the reporting company will be required to provide a full or partial copy of its directors’ report, free of charge, upon request. The Dutch government has included this option as they consider it important that the directors’ report of reporting companies is widely and easily accessible to stakeholders, for the law to meet its desired objective. The government deems the administrative burden arising from this requirement for reporting companies to be negligible. They also note that a publicly listed company must already disclose its directors’ report on its website.

The sustainability report – which will be part of the directors’ report – must be audited, and its relevant audit report must also be made public. As a result, statutory audit costs for reporting companies may see a (slight) increase.

When must companies report?

These new reporting requirements will be phased in. Reporting companies, which are considered large and have more than 500 employees, must apply the new reporting requirements to fiscal years beginning on or after 1 January 2024. For other large reporting companies, the reporting requirements apply to fiscal years starting on or after 1 January 2025, and for all other reporting companies, the reporting requirement will apply to fiscal years starting on or after 1 January 2026.

What does this mean for tax managers?

While this development may, at first glance, not seem to affect the corporate tax departments, it is not yet known what details must be included in the publicly available sustainability report. Such details will be included in another regulation. It is possible that the details that must be disclosed include details about, inter alia, lobbying activities, specific targets, and climate neutrality plans.

It is also worth noting that businesses are expected to meet “minimum safeguards” (“MS”) in respect of substantive topics while applying Articles 3 and 18 of the EU Taxonomy Regulation and the CSRD. The Platform of Sustainable Finance, advising on the functioning of the MS, issued a report in October 2022 that provides guidance on standards expected from businesses in compliance with the MS, and such standards include taxation as a substantive topic. More specifically, under the MS report standards, businesses are expected to (i) comply with the letter and spirit of tax laws and (ii) treat tax governance and tax compliance as critical risks for businesses. While the MS report is non-binding, it suggests the importance of tax in the context of sustainability disclosures.

The report will be widely available – for both the public and the competent authorities on a global scale. A reporting company’s tax position may thus receive additional and continued scrutiny.

In case you’d like to know more, or would like to have a conversation about other ESG initiatives, please reach out to your local Baker contact.


Maarten Hoelen joined Baker McKenzie in 2006 and regularly advises multinational operating companies on Dutch corporate national and international tax law and formal tax law. His clients consist primarily of innovative (Dutch) multinational companies. He assists them on setting up efficient international tax structures and assisted them with several mergers and acquisitions to grown their organizations. Recently Maarten was involved in an IPO of a well-known Dutch multinational company for which he setup their worldwide international tax structure in conjunction with the BakerMcKenzie transfer pricing team. Due to his extensive knowledge on the costs of payments and international financing, he also regularly advises several US based multinationals on the tax and financial aspects of their European operations, which allowed them to obtain significant cost savings. Besides, he often assists clients with tax audits from the local tax authorities and with legal tax procedures they are confronted with. Maarten is a lecturer at the Dutch law firm school and is currently working on a book on the Dutch Innovation box regime.


Lynn van den Berg is an associate in Baker McKenzie's Tax Practice Group in Amsterdam.


Gabrielle is a Senior Associate in the London office with over 15 years of experience (in the UK, EU and Brazil) supporting global businesses and non-profit organisations with legal, strategy, disputes, risk management and governance advice, in particular for tax and ESG matters.


Nienke van Etten is an EMEA tax knowledge lawyer within the Amsterdam Tax PG and specializes in global tax policy. While Nienke's focus is on global tax policy, Nienke also closely follows Dutch and EU tax policy. Nienke supports our Direct Tax, Indirect Tax and Transfer Pricing practice groups, bringing a multidisciplinary approach to each practice group

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