- Updated
- July 2025
- Sections
- 15
- Questions
- 44
Key Facts
Core Framework
Article 8b CIT Act
The arm's length principle is codified in article 8b of the Dutch Corporate Income Tax Act 1969 (“CIT Act”).
Transfer Pricing Decree, June 14, 2022, 2022-0000139020; English translation
The OECD Transfer Pricing Guidelines (“TPG”) are not incorporated in Dutch legislation, however based on the Dutch Transfer Pricing Decree, the TPG are considered as internationally accepted guidance providing explanation and clarification of the (application of the) arm’s length principle.
The Netherlands follows the OECD TPG in this respect.
The Dutch tax authorities accept foreign comparables as long as geographic differences have no material impact on the comparability. Comparables from the Pan-European region are in the majority of cases accepted.
The Dutch tax authorities can only use secret comparables for case selection and MAP cases.
The Netherlands follows the OECD TPG in this respect.
Documentation
Article 8b and Articles 29b up and to including 29h CIT Act
Article 8b paragraph 3 of the CIT Act requires taxpayers to document and substantiate all intercompany transactions in transfer pricing documentation. As no threshold applies to this obligation, this also applies to small and medium sized companies. This documentation requirement is form free. Companies that prepare a local file automatically fulfill this requirement.
Article 8b and Articles 29b up and to including 29h CIT Act
Article 8b paragraph 3 of the CIT Act requires taxpayers to document and substantiate all intercompany transactions in transfer pricing documentation. As no threshold applies to this obligation, this also applies to small and medium sized companies. This documentation requirement is form free. Companies that prepare a local file automatically fulfill this requirement.
Article 8b and Articles 29b up and to including 29h CIT Act
Article 8b paragraph 3 of the CIT Act requires taxpayers to document and substantiate all intercompany transactions in transfer pricing documentation. As no threshold applies to this obligation, this also applies to small and medium sized companies. This documentation requirement is form free. Companies that prepare a local file automatically fulfill this requirement.
There are no specific transfer pricing penalties. However, penalties may be levied and the burden of proof may shift to the taxpayer as in the case of other corporate income tax adjustments.
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
Selection: Most appropriate method
Dispute Resolution
Tax Ruling Decree, December 19, 2023, 2023-00000020007; Mutual Agreement Procedures (MAP) Decree of June 11, 2020, nr. 2020-0000101607; Netherlands’ MAP Profile
Please refer to the MAP profile of the Netherlands.
Tax Ruling Decree, December 19, 2023, 2023-00000020007; Mutual Agreement Procedures (MAP) Decree of June 11, 2020, nr. 2020-0000101607; Netherlands’ MAP Profile
Please refer to the MAP profile of the Netherlands.
Simplifications
Transfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 9.4.3.; English translation
If in an individual case about the arm’s-length fee for a guarantee it is not possible to determine a specific arm’s length guarantee fee (within a range), the Netherlands is willing to accept that the guarantee fee be set at half of the benefit obtained by the guarantee recipient (see the Transfer Pricing Decree).
Amount B Decree, November 27, 2024, 2024-0000528135.
The Netherlands respect the outcome of the application of the simplified and streamlined approach by a covered jurisdiction in line with the Inclusive Framework political commitment.
Special Topics
Transfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 5; English translation
The Dutch Transfer Pricing Decree contains specific guidance on certain issues related to the transfer pricing aspects of intangibles. The framework follows the guidance in Chapter VI of the TPG.
Transfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 5.3; English translation
The Dutch Transfer Pricing Decree incorporated the OECD’s guidance on hard to value intangibles and follows the guidance on HTVI in Chapter VI of the TPG.
Transfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 6; English translation
The Dutch Transfer Pricing Decree describes intra-group services, shareholder activities and mixed activities. The Decree contains several examples on whether a charge for a service can be considered as arm’s length.
Transfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 9, 10 and 11; English translation
The Dutch Transfer Pricing Decree contains sections on loans, captives and guarantees.
Full OECD Questionnaire
Legal ReferenceArticle 8b CIT Act
The arm's length principle is codified in article 8b of the Dutch Corporate Income Tax Act 1969 (“CIT Act”).
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020; English translation
The OECD Transfer Pricing Guidelines (“TPG”) are not incorporated in Dutch legislation, however based on the Dutch Transfer Pricing Decree, the TPG are considered as internationally accepted guidance providing explanation and clarification of the (application of the) arm’s length principle.
Legal ReferenceArticle 8b CIT Act
Article 8b CIT Act (codification of the arm’s length principle) applies if an entity participates, directly or indirectly, in the management, control or capital of another entity, or the same entity participates, directly or indirectly, in the management, control or capital of both the first and second entity.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020; English translation
In the Netherlands, the transfer pricing methods are incorporated in the Dutch Transfer Pricing Decree. The Decree includes all of the above methods.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (not provided)
Depending on the facts and circumstances, taxpayers have to choose a transfer pricing method. It is in principle up to the taxpayer to decide which method to apply, however, this must lead to an arm’s length outcome. The Netherlands also follows the OECD TPG in this respect.
- Hierarchy of methods (not selected)
- Most appropriate method (selected)
The Netherlands does not have specific guidance on commodity transactions. However, the Netherlands follows the OECD TPG in this respect.
The Netherlands follows the OECD TPG in this respect.
The Dutch tax authorities accept foreign comparables as long as geographic differences have no material impact on the comparability. Comparables from the Pan-European region are in the majority of cases accepted.
The Dutch tax authorities can only use secret comparables for case selection and MAP cases.
The Netherlands follows the OECD TPG in this respect.
There are no specific provisions regarding comparability adjustments in the Netherlands. However, and given the reference to the TPG, comparability adjustments are required, when necessary and provided that the adjustments increase comparability.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 5; English translation
The Dutch Transfer Pricing Decree contains specific guidance on certain issues related to the transfer pricing aspects of intangibles. The framework follows the guidance in Chapter VI of the TPG.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 5.3; English translation
The Dutch Transfer Pricing Decree incorporated the OECD’s guidance on hard to value intangibles and follows the guidance on HTVI in Chapter VI of the TPG.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 5.3; English translation
The Netherlands has adopted the approach in the transfer pricing decree in 2022 which contains the following paragraph on HTVI: 5.3 Hard-to-value intangibles (paragraphs 6.186 to 6.195). In the case of the transfer or licensing of intangible assets as described in paragraph 6.189 of the OECD Guidelines, where it is difficult for the Tax and Customs Administration to assess the value in relation to the present transactions due to major uncertainties regarding future value development, the Tax and Customs Administration can use the results actually achieved with the relevant intangible assets when assessing the arm’s length nature of the price at the time the transaction occurred. A major discrepancy is defined as a difference of over 20% compared with the projections that formed the basis for the price originally set. If such a discrepancy occurs only after a period of five years after revenues were realised for the first time with the intangible asset in transactions with independent parties, the intangible assets will not be regarded as ‘hard-to-value intangible assets’.
No.
Transactions falling within the scope of the HTVI approach are subject to the same statute of limitations that applies to other transactions.
It is possible under the same conditions as with other transfer pricing issues (including valuation issues).
In the Dutch transfer pricing decree, the Netherlands embrace the OECD guidelines including the guidance on hindsight. The decree is a public decree and in our internal training and discussions we always refer to the problem of the use of hindsight.
Other: The Netherlands see the HTVI-approach as a tool to discuss the arm’s length nature of the price at the time the transaction occurred. In general, the Netherlands do not expect this to lead to several adjustments for one HTVI transaction under the HTVI approach.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 6; English translation
The Dutch Transfer Pricing Decree describes intra-group services, shareholder activities and mixed activities. The Decree contains several examples on whether a charge for a service can be considered as arm’s length.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 6; English translation
The Dutch Transfer Pricing Decree incorporated the OECD’s approach on low value adding services, including the mark-up of 5%.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 9, 10 and 11; English translation
The Dutch Transfer Pricing Decree contains sections on loans, captives and guarantees.
Legal Referencee.g.: article 10a, 10b, and 15b CIT Act (interest deduction limitation rules); article 13ab CIT Act (CFC rules) and article 12aa CIT Act (hybrid mismatches rules).
Anti-abuse rules might apply to limit the deduction of interest. These anti-abuse rules vary from the EBITDA rule (BEPS Action plan 4 / ATAD) to limitations on interest deductions on related party financing transactions. In addition, the non-businesslike loan doctrine developed in Dutch case law is relevant in determining the tax treatment of a financial transaction. The case law deviates from the relevant paragraphs in the OECD guidelines.
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 7; English translation
The Dutch transfer pricing Decree contains specific guidance on certain issues related to cost contribution agreements including several examples. It follows the guidance in Chapter VIII of the TPG.
Legal ReferenceArticle 8b and Articles 29b up and to including 29h CIT Act
Article 8b paragraph 3 of the CIT Act requires taxpayers to document and substantiate all intercompany transactions in transfer pricing documentation. As no threshold applies to this obligation, this also applies to small and medium sized companies. This documentation requirement is form free. Companies that prepare a local file automatically fulfill this requirement.
- Master file consistent with Annex I to Chapter V of the TPG (selected)
- Local file consistent with Annex II to Chapter V of the TPG (selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (not selected)
- Other (specify) (selected)
Legal ReferenceArticle 8b and Articles 29b up and to including 29h CIT Act
The Dutch legislation on CbCR, master file and local file is in line with the OECD model legislation. The legislation applies on January 1, 2016. The documentation may be prepared in English or in Dutch. There is no requirement to file the master file and local file, however the documentation must be available at the moment the taxpayer is required to file its tax return for the same year. Taxpayers that prepare transfer pricing documentation based on Article 8b CIT Act, need to keep this documentation in their administration, so also for this documentation there is no filing requirement.
There are no specific transfer pricing penalties. However, penalties may be levied and the burden of proof may shift to the taxpayer as in the case of other corporate income tax adjustments.
The requirements for the submission of a country-by-country report do not apply to group entities of a multinational group that has achieved less than €750,000,000 in consolidated group revenue. The obligation for a master file and a local file applies to group entities of a multinational group that has generated at least € 50,000,000 in consolidated group revenues.
Legal ReferenceTax Ruling Decree, December 19, 2023, 2023-00000020007; Mutual Agreement Procedures (MAP) Decree of June 11, 2020, nr. 2020-0000101607; Netherlands’ MAP Profile
Please refer to the MAP profile of the Netherlands.
- Rulings (selected)
- Enhanced engagement or cooperative compliance programmes (selected)
- Advance Pricing Agreements (APA) (selected)
- Unilateral APAs (selected)
- Bilateral APAs (selected)
- Multilateral APAs (selected)
- International Compliance Assurance Programme (ICAP) (selected)
- Mutual Agreement Procedures (selected)
- Other (please specify): Multilateral and Joint audits (selected)
Legal ReferenceAmount B Decree, November 27, 2024, 2024-0000528135.
The Netherlands respect the outcome of the application of the simplified and streamlined approach by a covered jurisdiction in line with the Inclusive Framework political commitment.
Legal ReferenceAmount B Decree, November 27, 2024, 2024-0000528135, paragraph 3
The Amount B Decree of 2024 includes the following paragraph: “In the report, Inclusive Framework members, including the Netherlands, committed to accepting the outcome of the application of Amount B to the extent it was applied by so-called covered jurisdictions.”
Legal ReferenceTransfer Pricing Decree, June 14, 2022, 2022-0000139020, paragraph 9.4.3.; English translation
If in an individual case about the arm’s-length fee for a guarantee it is not possible to determine a specific arm’s length guarantee fee (within a range), the Netherlands is willing to accept that the guarantee fee be set at half of the benefit obtained by the guarantee recipient (see the Transfer Pricing Decree).
Legal ReferenceMutual Agreement Procedures (MAP) Decree of June 11, 2020, nr. 2020-0000101607
Please refer to par. 8.1 of the MAP decree of June 11, 2020.
In the Netherlands, a year-end adjustment is possible (and sometimes required) if this leads to an arm’s length outcome.
From the Dutch point of view, a secondary transaction is in general necessary for recognition of the transfer pricing adjustment.
The text of article 7 can have a different wording dependent on the outcome of negotiations. Some countries want to make use of the text of the UN model. The Netherlands has the new article 7 as it reads after 2010 in 14 treaties. In the other treaties there are different versions of article 7 (and not all the same as article 7 as it reads before 2010).
- Article 7 as it read before 2010. (selected)
- Article 7 as it reads after 2010. (selected)
- Other (please provide additional details) (selected)
Legal ReferenceDecree on profit allocation to permanent establishments 2022; English translation
The Netherlands is of the opinion that the commentary of 2008 embraced most of the principles of the AOA.
Legal ReferenceDecree on profit allocation to permanent establishments 2022; English translation
We would like to refer to our decree on profit allocation to permanent establishments (with explanation of the Dutch position on the AOA in general and more specific on the capital allocation method).
The Netherlands has adopted legislation to eliminate double non-taxation resulting from transfer pricing mismatches (articles 8ba, 8bb, 8bc and 8bd CIT Act). The rules apply as of 1 January 2022. The legislation provides that a downward adjustment of profits under the arm’s length principle is only allowed to the extent a corresponding adjustment will be included in a profit tax by the related party to the transaction. In addition, an adjustment in the tax basis for assets and liabilities transferred by a related party is only granted to the extent a corresponding adjustment for the arm’s length value is taken into account by the transferor. This also applies to transfers of assets and liabilities through contributions or distributions.
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