Transfer Pricing in the Netherlands

Updated on Thursday 26th July 2018

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The Netherlands imposed new guidelines on the transfer pricing, following the model provided by the Organization for Economic Cooperation and Development (OECD). On the 11th of May 2018, the Dutch authorities issued a new Transfer Pricing Decree (IFZ2018/6865), which prescribes new guidances on the application of the arm’s length principle.

The new legislation also includes the OECD’s regulations on Base Erosion and Profit Shifting (BEPS) and follows the 2017 OECD guidelines on Transfer Pricing; the document also replaced the Dutch Decree issued in November 2013. Our Dutch accountants can offer in-depth information on the tax regulations prescribed under the new legislation.

Transfer pricing methods in the Netherlands

The Netherlands applies all the transfer pricing methods that are prescribed by the OECD. At the same time, it may also accept pricing methods that are not included in the OECD Transfer Pricing Guidelines, but only in the situation in which they fall within the scope of the arm’s length principles. As a general rule, the Netherlands adopted the following pricing methods:

• tangible property – in the case of marketing and sales activities, they are remunerated in accordance with the revenues established at a gross margin or at a net margin;
• intangible property – in the case of transactions related to intangible property, it is generally applied the comparable uncontrolled prices; however, the profit-split method can also be applied;
• service transactions – they are remunerated in accordance with the direct costs incurred; they can also be calculated following the transactional net margin method;
• loans and advances – in this situation, the pricing is established following similar instruments.

New Dutch pricing methods following the OECD rules

Following the new OECD regulations, the Dutch Decree stipulates that the actual conduct of the parties can become more important than the contractual terms. Our accounting firm in the Netherlands can offer more details concerning this regulation. Also, it is important to know that risk control functions now have a more important role in the risk analysis of the transfer pricing.

Companies operating in the Netherlands are invited to address to our Dutch accounting firm for more details on the tax procedures available under the new Decree regulating transfer pricing following the OECD regulations. Our accountants can offer more details on the pricing methods available for tangible and intangible assets.