Netherlands

Market overview

Transfer pricing has been at the top of the Dutch tax authorities' agenda this year. As a result of the changing tax and TP climate and the OECD's BEPS project, the authorities have expanded their resources.

Unlike many of its neighbouring countries, the Dutch authorities have not become more aggressive and remain investor friendly. Although the authorities are hiring new professionals to collect more taxes and are reported to audit more, Friggo Kraaijeveld, head of tax at Kraaijeveld Coppus said: "You've got mutual understanding with each other. You're not best friends but you always have an open communication". Overall, the tax authorities are described as very friendly and very transparent and differ greatly from the aggressive authorities around the world.

Advisers report that the authorities have focused more on transfer pricing, which is increasing the burden on taxpayers when defending tax positions in audit or negotiating a tax ruling, resulting in more compliance work. Despite this, the authorities remain engaged and informed when addressing TP matters. "The reality is that the market is changing and there is a lot of tax litigation going on and everybody is preparing the structures they have and making them more robust," said Paulus Merks, of DLA Piper.

BEPS has also been a major topic in the Netherlands, as in most countries around the world. Taxpayers have actively been seeking general transfer pricing support including with documentation, country-by-country reporting (CbCR) and sustainability analysis assistance.

"A lot of clients are just waiting to see where things will go, but after the publication of the BEPS reports last October, depending whether or not Europe and the BEPS directive is going to be accepted and then implemented, you will see that companies are slowly starting to move on to the post-BEPS world," said Bartjan Zoetmulder, partner of Loyens & Loeff.

While changes are on the way, including BEPS recommendations and domestic legislation, the country only saw a few changes to its tax laws this year.

"It has been a stable year, of course we are also part of all the tax changes in the world. But the Dutch government has a good approach that we co-operate with everything and so on, but that we find it very important that the rules apply to every country in the world and not only to a few of them," said Michel Bilars, of AKD Netherlands.

The Netherlands was one of the first jurisdictions to commit to CbCR and the exchange of information rules. As of January 1 2016, CbCR rules became effective, requiring multinationals to comply with the transfer pricing documentation, including master and local files.

In regards to anti-avoidance, the overall view is that the Netherlands is committed to combat tax avoidance and improve tax transparency, however, it does not want the anti-avoidance measures to impact the Dutch business climate.

"Basically what we are seeing in the Netherlands is that the OECD has now embraced the approach that the Dutch authorities already took for a long time. The trend is not new to us, but what is new is that other countries agree with the Dutch approach," said Harmen van Dam, head of transfer pricing at Loyens & Loeff.


Tax authorities

Ministerie van Financiën
Korte Voorhout 7
Postbus 20201
2500 EE Den Haag
Tel: +31 70 342 80 00
Website: www.minfin.nl


Tax rates at a glance

(As of June 2016)

Corporate income tax 20/25% (a)
Capital gains 0%
Branch tax 20/25%
 
Withholding tax (b)
Dividends 15%
Interest 0%
Royalties from patents and licenses 0%
 
Net operating losses (years)
Carryback 1
Carryforwards 9

  1. If taxable profits are less than €200,000 ($258,000), the lower 20% rate applies
  2. The 15% domestic dividend withholding tax rate may be decreased under application of bilateral tax treaties and the EU Parent Subsidiary Directive

Source: Taxand Netherlands


Firm contact details

KPMG Meijburg
Loyens & Loeff
WTS World Tax Service