Newly updated Dutch transfer pricing guidance for financial services

On July 1, 2022, a new Dutch transfer pricing decree was issued by the Dutch State Secretary for Finance.

In this article, which is part of a series of five articles published in Bloomberg’s Tax Management International Journal, Monique van Herksen and Clive Jie-A-Joen provide insights into the new Dutch transfer pricing guidance published in July of this year.

The new Dutch guidance as regards transfer pricing for financial service entities has been highlighted separately, although the new Dutch Decree addresses a myriad of issues.

From the article regarding financial service entities it becomes clear that those entities should be more than mere shell companies that exploit available tax treaties and other tax benefits, and that Chapter X of the OECD Transfer Pricing Guidelines on Financial Services also applies to these entities for determining their arm’s length remuneration. Next, guidance is provided on how domestic transfer pricing documentation rules dovetail with the Country-by-Country Report, Master File and Local File documentation requirements. Finally, avoidance of double taxation through Mutual Agreement Procedures (MAP) is discussed, together with the benefit of (requesting for) exchange of information and availability of a waiver for the application of secondary adjustments in certain circumstances.