Netherlands: Updated decree, rules for mutual agreement procedures

Netherlands: Updated rules mutual agreement procedures

The Deputy Minister of Finance on 22 June 2020 issued a decree updating the mutual agreement procedures (Besluit Onderlinge overlegprocedures).


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The decree is effective retroactively to 11 June 2020, and replaces a prior (2008) decree.

The decree provides, from a Dutch perspective, a detailed explanation and interpretation of the implementation of mutual agreement procedures (MAP) as regulated in the “Tax Dispute Resolution Mechanisms Act” (Wet fiscale arbitrage—WFA), the bilateral income tax treaties, and the EU Arbitration Convention.

The most important changes in the new decree (compared to those of the previous decree) are:

  • The process for mutual agreement procedures under the new Tax Dispute Resolution Mechanisms Act has been included.
  • The distinction between the regular, early, and “extra early” mutual agreement procedure ceases to apply.
  • There is a concession policy for situations when no outcome can be reached in the mutual agreement procedure due to the overlap with international court judgments.
  • There is a concession policy under which conditions the inspector may make a corresponding adjustment after the expiry of the deadline.
  • A description is included of how the Dutch competent authority deals with agreement procedures in triangular relationship situations.
  • There is a policy on the terms and conditions when applying for a bilateral advance pricing agreement (BAPA) or a multilateral advance pricing agreement (MAPA), which are the same as the terms and conditions when applying for a unilateral advance pricing agreement (APA).
  • A policy is included on interest on tax due and late-payment interest in mutual agreement procedures, which has been brought into line with practice.

KPMG observation

Tax professionals believe the new decree provides a welcome explanation and clarification of the existing law and regulations regarding mutual agreement procedures. Dutch taxpayers now have a better idea of the legal remedies available to prevent double taxation. An important acknowledgment in this decree is the explicit reference to a 2017 judgment of the Amsterdam district court, in which the Dutch tax authorities’ initial refusal to admit the taxpayer in a MAP procedure was characterized as a decision. Such a refusal is consequently admissible for objection and appeal before the administrative court. Therefore, according to the Deputy Minister, legal action can be taken outside the Tax Dispute Resolution Mechanisms Act.

Finally, the decree reflects the Dutch interpretation of mutual agreement procedures, which may be interpreted differently by another country.

Read a June 2020 report prepared by the KPMG member firm in the Netherlands

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