NETHERLANDS LAW AND PRACTICE Contributed by: Jimmie van der Zwaan, Rob Langeveldt, Vasisthà Parmessar, Willem Koeleman and Bart-Jan Paardekooper, Borgen Tax
5. Adjustments 5.1 Upward Transfer Pricing Adjustments The taxpayer can supplement or amend a cor - porate income tax return as long as no final assessment has been imposed. If the taxpayer has already received a final assessment, the taxpayer can only pursue adjustments by filing an objection within six weeks or requesting an ex officio reduction within five years after fis - cal year-end if the assessment is already final ( ambtshalve vermindering ). If the requested adjustment is based on a foreign transfer pric - ing adjustment, a request for a corresponding adjustment or a MAP can be filed. In general, the tax inspector has three years to impose a final tax assessment after the end of the fiscal year. If the extension ruling for con - sultants, which allows an extension for filing the corporate income tax return until the following fiscal year, is used, the inspector will have an additional year to impose the final tax assess - ment. The tax inspector can impose an addi - tional tax assessment until five years after the end of the fiscal year if the taxpayer acts in bad faith or “new facts” appear. 5.2 Secondary Transfer Pricing Adjustments Dutch transfer pricing regulations adhere to the arm’s length principle as outlined in Article 8b of the Dutch Corporate Income Tax Act 1969 and further elaborated in the Dutch TP Decree. The Decree emphasises the necessity of recognis - ing secondary transactions to accurately reflect the economic consequences of primary transfer pricing adjustments. In the Netherlands, when a transfer pricing adjustment (primary adjust - ment) is made to an intercompany transaction, it is generally also necessary to recognise a cor - responding secondary transaction to reflect the
economic reality of the adjustment. This second - ary transaction can take various forms, such as a deemed dividend distribution, an informal capital contribution, or the recognition of a deemed loan between the involved entities. These secondary transactions may trigger additional tax implica - tions, including potential dividend withholding tax on deemed distributions or the imputation of arm’s length interest on deemed loans. There are exceptions. If the taxpayer can dem - onstrate that, due to differences in tax systems between the jurisdictions involved, the second - ary adjustment (eg, dividend withholding tax) cannot be offset and there is no intention to avoid taxation, the DTA may omit the secondary adjustment. This exception is not applicable if the other jurisdiction is listed as a non-coopera - tive tax jurisdiction in the relevant year; in such cases, the secondary adjustment, including any applicable dividend withholding tax, will be enforced.
6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information Ruling Exchanges
APAs, advance tax rulings (ATRs) and innovation box rulings are exchanged with the tax authori - ties in the jurisdictions in which the involved par - ties are tax resident. DAC6 Cross-border structures that fulfil certain hall - marks must be reported and subsequently exchanged with other EU countries. The TP hallmarks in DAC6 are the hallmarks under E, which are:
268 CHAMBERS.COM
Powered by FlippingBook