As from January 1, 2016 new Transfer Pricing legislation for multinationals has come into effect in The Netherlands.
The new legislation is a result of the OESO BEPS report and obligates two categories of multinationals to extend their Transfer Pricing report
Country by Country Reporting
If the Dutch taxpayer is an ultimate parent company of a multinational group with a turnover exceeding EUR 750 million it has to file a country by country report. This report contains information about the gross revenue, the income before tax, the paid corporate income tax according to the financial statements, the actually paid corporate income tax, the paid-in capital, the amount of personnel and tangible assets other than liquid assets per country in which they are active.
The country by country reporting obligation also applies when the Dutch taxpayer is not the ultimate parent company and:
- the ultimate parent is not obligated to file a country by country report in his respective country;
- the country of the ultimate parent company does not have a treaty for mutual administrative assistance in tax matters with The Netherlands or;
- the ultimate parent company failed to file the ultimate parent company in his respective country.
The country by country report has to be filed within twelve months after the end of the financial year of the ultimate parent company.
Master and local file
If the Dutch taxpayer is part of a multinational group with a turnover exceeding EUR 50 million is has to provide a master and a local file. The master file contains information about the activities of the company, it’s Transfer Pricing policy and the multinationals worldwide allocation of income and activities. The local file contains information about the Transfer Pricing of intra group services and between the Dutch taxpayer and it’s group members.
The master and local file have to be filed whitin the period for the corporate income tax return.
The implications on your Transfer Pricing policy
It is important to asses what the new Transfer Pricing legislation means for your company and if you company has all the data needed to file the requested reports. Crowe Horwath Peak is your partner in documenting the Transfer Pricing data and filing the new Transfer Pricing reports.