NETHERLANDS Trends and Developments Contributed by: Herald Jongen, Radboud Ribbert, Nienke Bernard and Wouter van Wengen, Greenberg Traurig, LLP
The Netherlands implemented DAC7 into its national legislation, enforcing the Directive as of 1 January 2023. Consequently, 2024 was the first year that platform operators were required to report before 31 January 2024, over the year 2023. Platform operators in the scope of DAC7 are subject to a registration requirement, con - tinuous due diligence of sellers on their platform, and annual reporting of the income earned by sellers on the platform. Non-compliance with the Dutch implementation of DAC7 may lead to a penalty of up to EUR1.03 million. Developments in Digital Services Taxes Pillar One is part of the OECD’s framework to address the tax challenges of the digital econ - omy. Pillar One, Amount A, aims at reallocat - ing taxing rights to market jurisdictions where large digital multinationals generate significant revenues. Digital services taxes (DSTs), on the other hand, are unilateral measures of countries aimed at taxing specific digital activities, such as online advertising and platform intermediation, in the absence of a global agreement on Pillar One, Amount A. The Dutch government’s position on the intro - duction of a DST has evolved over time. In the December 2021 coalition agreement, Dutch parliamentary parties that agreed to form a new government initially agreed to introducing a DST in the Netherlands. However, this plan was never pursued and the government’s preference for a global solution was emphasised repeatedly. The Netherlands has consistently advocated for a global agreement under Pillar One, Amount A. Despite intensive negotiations, the OECD’s extended deadline of June 2024 has not been met. The lack of progress may lead the Nether - lands to reconsider its stance. In June 2024, the Dutch State Secretary for Finance indicated that if a DST should be introduced in the absence of
a global solution, he prefers a uniform DST at EU level. Increase in Transfer Pricing Disputes in the Netherlands In recent years, the Netherlands has seen a significant rise in transfer pricing (TP) disputes. Dutch tax authorities have become more asser - tive in challenging the TP arrangements of mul - tinationals, especially in the TMT sector, where intellectual property (IP) often plays a central role. Recent Dutch case law demonstrates the increased scrutiny that taxpayers face, with a particular focus on the burden of proof and the consistency of TP documentation. For compa - nies operating in the TMT sector, where IP assets are frequently used cross-border, this trend highlights the need for robust and defensible TP policies. A lack of clear, accurate documen - tation and valuation can lead to costly disputes and penalties, as demonstrated by recent cases where insufficient evidence led to unfavourable rulings for taxpayers. Impact of Global Minimum Tax on Dutch Tax Incentives As per 1 January 2024, the Netherlands intro - duced a global minimum tax in line with the OECD’s Pillar Two framework and the EU Mini - mum Tax Directive. As a result, the Netherlands applies a top-up tax if the effective tax rate of a group of companies in a jurisdiction is below 15%. The introduction has raised concerns about the impact on tax incentives like the Dutch “innovation box” regime, which offers a reduced tax rate of 9% on profits generated with qualify - ing innovative activities. These incentives have been particularly important for companies in the TMT sector, which often rely on tax benefits to compensate for significant R&D investments.
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