The Netherlands State Secretary for Finance issued Decree No. IFZ 2013/184M on 26 November 2013 (Official Gazette No. 32854) which relates to the application of the arm’s length principle and the OECD Transfer Pricing Guidelines. The revised decree replaces Decrees Nos. IFZ 2001/295M and IFZ 2004/680M and is effective on the day after publication.
The new decree covers some new areas such as the relationship with the EU Joint Transfer Pricing Forum and loan guarantees. It also provides detailed descriptions of documentation requirements and outlines processes for early consultation with the competent authorities where dual taxation issues arise.
The new decree also provides a more detailed description of the application of the arm’s length principle, and incorporates amendments which flow from changes to the OECD Transfer Pricing Guidelines. It clarifies the list of shareholder activities; these will not be considered services rendered to a related party insofar as (i) they do not contribute any commercial or economic value to that concern (or parts thereof), and (ii) the concern (or part thereof) is not willing to pay for such services. The decree also replaces the text in paragraph 12 of the previous decree (which covers the term “financial services”) with a text on “financing transactions”.
