The Dutch Ministry of Finance published a new transfer pricing decree nr. 2018-6865 on 22 April 2018, which was published in the State Gazette on 11 May 2018. The Decree is in line with the outcomes of the Base Erosion and Profit Shifting (BEPS) project initiative. The new decree replaces the decree issued in 2013 (nr. IFZ 2013/184M). The new decree provides insight into the interpretation of the arm’s length principle, and mainly focuses on aspects where the OECD guidelines leave room for a jurisdiction’s own interpretation or where uncertainty exists.
The main differences between the 2013 and 2018 Dutch transfer pricing decrees are:
- Clarification of the process in which a transaction to be assessed between affiliated parties is characterized;
- Further explanation of the application of the transfer pricing methods in specific situations;
- Adjusting the section on the pricing of intangible assets when the valuation is highly uncertain;
- Clarification about hard-to-value intangible assets (a new provision), with guidance on acceptable deviations in projections and a five-year monitoring period;
- A new section on the purchase of shares in an unincorporated company followed by a business restructuring;
- A section on remuneration for the so-called ‘low value adding services’;
- Textual changes to better align the terminology used with the terminology as used in the adapted OECD guidelines.
