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Netherlands: New transfer pricing decree incorporates OECD standards

Netherlands: New transfer pricing decree

The Dutch Ministry of Finance on 11 May 2018 published a new transfer pricing decree that incorporates provisions from the OECD’s base erosion and profit shifting (BEPS) action plans (2015) and from the OECD’s Transfer Pricing Guidelines (2017).


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The new Dutch transfer pricing decree (nr. 2018-6865, dated 22 April 2018) replaces a decree from 2013 (IFZ 2013/184M, 14 November 2013). 

Arm’s length principle

Concerning cross-border (intercompany) transactions, there is consensus among the OECD member countries with regard to the arm’s length principle as included in Article 9 of the OECD Model Tax Convention. The arm’s length principle has also been described in the OECD Commentary to Article 9 of the OECD Model Tax Convention and the 2017 OECD Transfer Pricing Guidelines. This arm’s length principle was codified in the Netherlands, in 2002 as section 8b of the Dutch Corporation Tax Act 1969. 

The new Dutch transfer pricing decree provides insight into the interpretation of the arm’s length principle, and in particular, focuses on aspects for which the 2017 OECD Transfer Pricing Guidelines leave scope for domestic interpretation.

The main differences between the 2013 and 2018 Dutch transfer pricing decrees are:

  • Clarification of the process under which intercompany transactions are to be characterized, with the aim to fully reconcile to the actual value creation within a multinational enterprise (MNE)
  • Further explanation with respect to application of transfer pricing methods in specific situations, with greater focus on risk and intellectual property (IP) management functions and providing guidance on valuation methods
  • Amendments with regard to the rules in the section about the pricing of intangible assets at the moment when the valuation is highly uncertain
  • Clarification about hard-to-value intangible assets (a new provision), with guidance on acceptable deviations in projections and a five-year monitoring period
  • Clarification about the purchase of shares in a third-party company, followed by a business restructuring (a new provision), and in particular when IP is transferred to a different group company
  • Amendments allowing a simplified determination of arm's length charges with regard to “low value adding services” applying a mark-up of 5%, and a stipulation that such services may, under certain conditions, be charged at cost
  • Amendments to better align the terminology used in the Dutch rules with the terminology used in the 2017 OECD Transfer Pricing Guidelines


For more information, contact a tax professional with KPMG’s Global Transfer Pricing Service group in the Netherlands:

Jeroen Dijkman | +31 (0)88 909 2543 |

Jaap Reyneveld | +31 (0)88 909 1114 |

Eduard Sporken | +31 (0)88 909 1618 |


Read a May 2018 report prepared by the KPMG member firm in the Netherlands

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