NETHERLANDS LAW AND PRACTICE Contributed by: Jimmie van der Zwaan, Rob Langeveldt, Vasisthà Parmessar, Willem Koeleman and Bart-Jan Paardekooper, Borgen Tax
tive fine will not exceed the amount of the sixth category ( Wetboek van Strafrecht ) as referred to in Article 23(4) of the Dutch Penal Code (ie, EUR1,030,000). The administrative fine is imposed by means of a fine decision. Pursuant to the General Admin - istrative Law Act ( Algemene wet bestuursrecht ), objections against such a decision can be sub - mitted to the DTA. Following the objection, a new decision is taken. An appeal against this deci - sion can be filed with the administrative court. 8.2 Transfer Pricing Documentation Specific transfer pricing documentation may be required depending on the annual consolidated revenue of the MNE. The Netherlands requires a master file, as well as a local file for MNEs with a consolidated annual revenue of EUR50 mil - lion or more, and a CbC report and notifications for MNEs with a consolidated annual revenue of EUR750 million or more. Both have been intro - duced starting in FY 2016. The Netherlands has implemented the master file/local file and CbCR requirements in accordance with the OECD/G20 BEPS Action Plan 13. 9. Alignment With OECD Transfer Pricing Guidelines 9.1 Alignment and Differences In January 2022, the OECD Transfer Pricing Guidelines were updated. This update includes the addition of Chapter X to the Guidelines on transfer pricing aspects of financial transactions. In addition, a section on hard-to-value intangi - bles has been added.
In June 2022, the Dutch Decree Stcrt No 2022/16685 was updated as follows: • The section on government policy has been expanded, with a discussion on government aid measures. • Several new sections on financial transac - tion have been adjusted. There is more focus on the substance and the application of the comparable uncontrolled price method. The paragraphs regarding guarantees and cap - tives have also been rewritten. • There is now a section regarding cash pools. • There is now a section regarding financial service entities. • Adjustments have been made to the policy on intra-group services. • Some textual changes in line with OECD TP Guidelines have been made. The adjustments are a consequence of interna - tional developments, such as the new OECD TP Guidelines and OECD publications on the treat - ment of government subsidies. Since the OECD Guidelines provide an internationally accepted interpretation of the arm’s length principle, the secretary of finance considers the OECD Guide - lines to be an appropriate explanation and clari - fication of the principle described in Article 8b of the DCITA. Case Law The Netherlands has some specific case law regarding financial transactions, which involves a landmark case from 1988 (27 January 1988, No 23 919). The main conclusions were that intercompany loans can only be recharacterised as equity if they possess specific features, either being a loss-financing loan, a profit-participating loan or sham loan. The definitions of these kinds of loan have been precisely defined in case law. There seem to be relevant differences between
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