OECD TP Guidelines · Netherlands

Transfer Pricing Tool
— Netherlands

Netherlands transfer pricing rules, documentation requirements, and penalty regime. Free OECD-compliant benchmarking tool with arm's length range analysis.

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Transfer Pricing in Netherlands

The Netherlands is one of the most important jurisdictions for transfer pricing in Europe, serving as a holding, finance, and IP hub for multinational groups. Article 8b of the Wet op de Vennootschapsbelasting 1969 (Wet VPB 1969) codifies the arm's length principle for Dutch corporate income tax purposes. The Netherlands closely follows OECD Transfer Pricing Guidelines and applies the standard interquartile range (25th–75th percentile). The Verrekenprijzenbesluit (Transfer Pricing Decree) of 2022 provides detailed guidance on the application of TP rules in the Dutch context, including specific provisions for intragroup services, financial transactions, and business restructurings.

Dutch TP documentation requirements follow the OECD Chapter V three-tiered structure: Master File, Local File, and Country-by-Country Report (for groups with €750M+ consolidated revenue). Documentation must be available at the time of filing the corporate income tax return and must be provided within a reasonable period upon Belastingdienst request (typically 4 weeks). The Netherlands offers Advance Pricing Agreements (APAs) through the Belastingdienst, allowing taxpayers to agree their transfer pricing methodology with the tax authority in advance — providing certainty for 4-5 years. Bilateral APAs with treaty partners are also available and provide protection against double taxation.

The Dutch substance requirements are critical for transfer pricing: to benefit from the Dutch tax treaty network and to support the arm's length nature of intercompany transactions, Dutch entities must have adequate economic substance — qualified personnel, appropriate office facilities, and genuine decision-making authority. The Belastingdienst has increased scrutiny of Dutch entities that act as principals or IP holders without commensurate substance. The Netherlands has also implemented ATAD interest limitation rules (Article 15b Wet VPB 1969), limiting net interest deductions to 20% of EBITDA (with a €1M threshold), which interacts with transfer pricing for intercompany financing arrangements. The conditional withholding tax on interest and royalties to low-tax jurisdictions adds further complexity to Dutch TP structures.

Netherlands TP Quick Reference

Local TP Legislation
Article 8b Wet op de Vennootschapsbelasting 1969 (Wet VPB 1969), Verrekenprijzenbesluit (TP Decree)
Tax Authority
Belastingdienst (Dutch Tax and Customs Administration)
Documentation Threshold
All corporate taxpayers with cross-border related-party transactions must maintain TP documentation. The Netherlands follows OECD Chapter V — Master File + Local File required. CbCR for groups with €750M+ consolidated revenue. No formal de minimis exemption, but the Belastingdienst focuses audit resources on significant transactions.
Percentile Range
25th–75th percentile
Penalty Regime
The Netherlands does not have a standalone TP documentation penalty. Penalties arise through the general tax penalty regime: up to 100% of the additional tax for deliberate non-compliance, up to 25% for negligence. However, having no documentation reverses the burden of proof — the Belastingdienst can estimate the arm's length price. This de facto penalty makes documentation essential.

Common TP Audit Triggers in Netherlands

Dutch entity acting as IP holder or principal without adequate substance

Significant royalty or interest payments to low-tax jurisdictions

Dutch entity consistently loss-making or low-margin despite central role

CbCR data showing profit misalignment with Dutch functions and risks

Intercompany financing arrangements with rates outside market norms

Business restructurings transferring functions or risks out of the Netherlands

Netherlands vs. OECD Guidelines: Key Differences

The Netherlands closely follows OECD Guidelines. Key features: (1) APA/ATR ruling practice provides advance certainty; (2) substance requirements for holding, financing, and IP entities; (3) ATAD interest limitation (20% EBITDA); (4) conditional withholding tax on interest/royalties to low-tax jurisdictions; (5) burden of proof reversal without documentation.

Frequently Asked Questions — Netherlands Transfer Pricing

What are the Dutch TP documentation requirements?
The Netherlands requires Master File + Local File following OECD Chapter V. Documentation must be available at the time of corporate income tax return filing. CbCR required for groups with €750M+ consolidated revenue. No formal de minimis exemption, but the Belastingdienst's practical approach focuses on material transactions.
What are the penalties for TP non-compliance in the Netherlands?
No standalone TP documentation penalty exists. However, without documentation, the burden of proof shifts to the taxpayer. General tax penalties apply: up to 25% for negligence, up to 100% for deliberate non-compliance. In practice, the burden of proof reversal is the most significant consequence — it gives the Belastingdienst power to estimate arm's length pricing.
How do Advance Pricing Agreements (APAs) work in the Netherlands?
Taxpayers can request a unilateral or bilateral APA from the Belastingdienst. The APA process takes 6-18 months and provides certainty for 4-5 years. Bilateral APAs with treaty partners are particularly valuable as they prevent double taxation. The Netherlands has extensive APA experience and an efficient ruling process.
What are the Dutch substance requirements for TP?
Dutch entities acting as principals, IP holders, or financing entities must have adequate substance: qualified board members, decision-making in the Netherlands, sufficient equity, office facilities, and qualified employees. The substance requirements are codified in various legislative provisions and are critical for TP credibility.
How do ATAD interest limitation rules affect Dutch TP?
Article 15b Wet VPB 1969 limits net interest deductions to 20% of EBITDA (€1M threshold). This interacts with TP for intercompany loans — even if the interest rate is arm's length, the deduction may be limited. Additionally, the conditional withholding tax on interest and royalties to low-tax jurisdictions affects outbound payments.

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