The Netherlands releases New 2022 Decree on application of the Arm’s Length Principle

Posted on | By TP News
Category: Transfer Pricing News | Tag: , , , , , , , ,
« | »

On 1 July 2022, the tax authorities in the Netherlands published Decree No. 2022-0000139020 of 14 June 2022 containing local guidance on application of the arm’s length principle.

The Decree is based on article 9 of the OECD Model Tax Convention and the OECD Transfer Pricing Guidelines and also contains references to local case laws.

In the Decree, particular focus is on areas that have been updated in the most recent releases of the OECD Transfer Pricing Guidelines – Legal ownership, DEMPE functions, Services, HTVI and Valuation Methods, Government policies (COVID-19), Remuneration of Procurement activities, Financial transactions etc.

 

Click here for Unofficial English translation

Click here for other translation

Related Guidelines

TPG2022 Chapter VI paragraph 6.156 It is not the intention of these Guidelines to set out a comprehensive summary of the valuation techniques utilised by valuation professionals. Similarly, it is not the intention of these Guidelines to endorse or reject one or more sets of valuation standards utilised by valuation or accounting professionals or to...
TPG2022 Chapter VI paragraph 6.193 This approach will not apply to transactions involving the transfer or use of HTVI falling within the scope of paragraph 6.189, when at least one of the following exemptions applies: i) The taxpayer provides: Details of the ex ante projections used at the time of the transfer to determine the...
TPG2022 Chapter VI paragraph 6.190 Transactions involving the transfer or the use of HTVI in paragraph 6.189 may exhibit one or more of the following features: The intangible is only partially developed at the time of the transfer. The intangible is not expected to be exploited commercially until several years following the transaction. The intangible...
OECD COVID-19 TPG paragraph 68 The extent to which the receipt of government assistance is an economically relevant characteristic may vary. An example of where government assistance may be more economically relevant is the provision of a wage subsidy, a government debt guarantee or short-term liquidity support. In such circumstances, the receipt of government assistance...
TPG2022 Chapter VII paragraph 7.49 The following bullet points provide examples of services that would likely meet the definition of low value-adding services provided in paragraph 7.45: accounting and auditing, for example gathering and reviewing information for use in financial statements, maintenance of accounting records, preparation of financial statements, preparation or assistance in operational and...
TPG2022 Chapter VI Annex I example 27 97. Company A is the Parent of an MNE group with operations in country X. Company A owns patents, trademarks and know-how with regard to several products produced and sold by the MNE group. Company B is a wholly owned subsidiary of Company A. All of Company B’s operations are...
OECD COVID-19 TPG paragraph 81 Under the guidance of Chapter I of the OECD TPG, the provision of government assistance to an associated party will not change the allocation of risk in a controlled transaction for transfer pricing purposes. For instance, assume Company W is a distributor that purchases goods from a related party manufacturer...
OECD COVID-19 TPG paragraph 70 Section D.4 of Chapter I of the OECD TPG elaborates on the effect of government policies noting that, as a general rule, government interventions should be treated as conditions of the market in the particular country. Therefore, the receipt of government assistance may be part of the economic circumstances of...
OECD COVID-19 TPG paragraph 71 In particular, by analogy to section D.6.2 of Chapter I of the OECD TPG, the analysis of the implications of the receipt of government assistance would need to consider the following factors (not only to identify reliable market comparables when they exist, but also in cases where such comparables cannot...
OECD COVID-19 TPG paragraph 83 For example, as government assistance and the specific circumstances of the COVID-19 pandemic may vary across different markets, it may affect the comparables and the arm’s length prices of uncontrolled transactions in different ways.39 For instance, assume Company D, a member of an MNE group, provides manufacturing services and receives...