Transfer pricing in the Netherlands

Business transactions are becoming increasingly complex. It is essential to have a clear understanding of pricing dynamics within your organization, not only to demonstrate compliance with (international) legislation but also to avoid undue or double taxation. Seeking assurance of optimal compliance, clarity, and tax efficiency? Our experts provide comprehensive assistance every step of the way. 

Which documentation is required and when? 

For multinational corporations with a consolidated group turnover of at least €50 million, there are specific documentation prerequisites concerning transfer pricing. Documentation entails the preparation of a global master file and a (Dutch) local file, adhering to the stipulated content requirements outlined by the OECD and Dutch legislation. 

Moreover, groups with a consolidated turnover of €750 million are mandated to prepare and submit a country-by-country (CBC) report. This report offers insights into the allocation of revenues, profits, taxes, and other pertinent economic activities across jurisdictions. 

Download: Requirements for Dutch transfer pricing

Section 29b-h of the CITA specifies that the documentation requirements for taxpayers who meet certain standards are a Local File, a Master File, and relevant Country by Country Reporting. We have condensed these requirements into a clear table. Download the document here!

A strong transfer pricing policy is half the battle 

A transfer pricing policy, also known as a “transfer pricing strategy,” delineates a company’s methodology for pricing intercompany transactions. While not legally mandated, these policies typically address: 

• Functions of the entities involved. 
• Utilized assets. 
• Assumed risks. 
• Arm’s-length pricing. 

A robust transfer pricing policy is essential for ensuring compliance and maximizing tax advantages. Are you currently equipped with a policy, or are you contemplating drafting one? Our team stands ready to provide guidance and assistance in crafting an effective policy tailored to your organization. 

What if your company has no transfer pricing documentation?  

The international master file and local file must be readily available in the administration by a clear deadline. Failure to provide these documents could result in a fine of approximately €9,000, and the burden of proof may be shifted, potentially resulting in substantial corrections. 

Taxpayers are generally given a reasonable period of several weeks to provide the missing documentation. Nonetheless, this situation often triggers challenging discussions with tax authorities and can cause considerable uncertainty if the documentation is not yet in place. 

Health check of the at arm’s length profits 

Robust substantiation of your business profit is imperative to demonstrate compliance with arm’s length and legal provisions in your transactions and pricing. This is vital not only for internal decision-making but also for external stakeholders such as tax authorities. 

We conduct a comprehensive assessment of your financial data, processes, and transactions, enabling you to confidently meet external reporting obligations. Our goal is to deliver a clear and compelling depiction of your business profits. 

Compliant and effective management of transfer pricing documentation  

Crowe Peak’s team of tax specialists is a team of experienced professionals with extensive expertise in local and international tax legislation. We provide personalized solutions designed to meet individual needs and circumstances. Kindly indicate the areas where support is needed in the contact form below, and one of our tax specialists will reach out to you directly.