NETHERLANDS Law and Practice Contributed by: Jimmie van der Zwaan, Rob Langeveldt, Vasisthà Parmessar and Willem Koeleman, Borgen Tax
Cross-border structures that fulfil certain hallmarks must be reported and subsequently exchanged with other EU countries. The TP hallmarks in DAC6 are the hallmarks under E, which are: • E.1 – cross-border arrangements that rely on a unilateral safe-harbour rule; • E.2 – arrangements that involve hard-to-value intangibles; and • E.3 – intragroup cross-border transfers of assets, functions and risks where the projected annual EBIT – during the three years after the transfer – amounts to less than 50% without the transaction. Bilateral Approach The Netherlands has been actively concluding Tax Information Exchange Agreements (TIEAs). On a bilateral level, the Netherlands is concluding TIEAs specifically aimed at the exchange of information and is including provisions in accordance with Article 26 of the OECD Model Convention. Since 2009, around 28 TIEAs have been concluded. Domestic Law Based on the International Assistance (Levying of Taxes) Act ( Wet op de internationale bijstandsverlen- ing bij de heffing van belastingen , or WIBB), informa - tion is provided to foreign competent authorities upon request if there is a financial services company that does not have sufficient substance in the Nether - lands. No exchange of information will be applicable if the financial services company fulfils the substance requirements. Spontaneous exchange of information is also possible if that exchange may lead to specific tax consequences in foreign countries (eg, a withhold - ing tax reduction that would otherwise not have been granted). 6.2 Joint Audits The Netherlands actively collaborates with foreign tax authorities in conducting joint tax audits and has established specific co-operation programmes with various countries. Within the European Union, the Netherlands participates in the advanced administra - tive co-operation framework, which facilitates joint audits among EU member states. This framework enables tax administrations to co-ordinate audits, share information, and produce joint reports, there -
by enhancing tax compliance and dispute resolu - tion. Beyond the EU, the Netherlands is a member of the Joint Chiefs of Global Tax Enforcement (J5), an international alliance formed in 2018 comprising tax enforcement authorities from Australia, Canada, the Netherlands, the United Kingdom and the United States. The J5 focuses on combating transnational tax crime through collaborative investigations, intel - ligence sharing, and joint operations. Additionally, the Netherlands has a comprehensive network of tax treaties with numerous countries, facilitating bilateral co-operation in tax matters. These treaties often include provisions for mutual assistance in tax enforcement and the exchange of information, further supporting joint audit initiatives. 6.3 Simultaneous Controls As an EU member state, the Netherlands has imple - mented EU Directive 2011/16 in the International Assistance for Taxes Act ( Wet op de internationale bij- standsverlening bij de heffing van belastingen (WIB)). Part of this directive is the Simultaneous Control Framework, which is put down in Article 8a WIB. Prac - tical implementation is provided in the WIB Decree of the State Secretary (22-12-2011, State Gazette 2011, 674). The Dutch State Secretary will appoint a contact responsible for co-ordination and that is in the lead of the Dutch side of the Simultaneous Control. 6.4 International Compliance Assessment Programme (ICAP) The Dutch Tax and Customs Administration’s ICAP function operates through a multidisciplinary team that typically includes a single point of contact, an ICAP co-ordinator, case managers and transfer pric - ing specialist. The assessment is carried out in close co-ordination with the client co-ordinator and the rel - evant account teams of the multinational enterprise. The tax authority does not require prior consent from the group parent to discuss local tax arrangements directly. The standard ICAP coverage includes two complet - ed tax years and two roll-forward years, although in
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