NETHERLANDS TRENDS AND DEVELOPMENTS Contributed by: Jan-Willem Kunen, Natalie Reypens and Gijs van Koeveringe, Loyens & Loeff
Introduction The Dutch transfer pricing landscape under - went significant developments in 2024 and early 2025. Notably, these include the further clarifica - tions on the transfer pricing mismatch legisla - tion, Dutch case law addressing various transfer pricing matters, the implementation of Amount B, and the implementation of Public Country-by- Country Reporting legislation. Additionally, this article examines relevant European and interna - tional developments influencing the Dutch trans - fer pricing landscape. Clarification Around Transfer Pricing Mismatch Legislation As of 1 January 2022, the Netherlands has incor - porated legislation into its Corporate Income Tax Act (CITA) to prevent double non-taxation aris - ing from transfer pricing mismatches. The leg - islation requires Dutch taxpayers to ensure that intercompany transactions are priced at arm’s length and correctly documented. Failure to comply may lead to unfavourable Dutch corpo - rate income tax (CIT) implications. The legislation includes three main elements: • Article 8bb of CITA – ie, no downward adjust - ment of the Dutch taxable profit without a corresponding adjustment; • Article 8bc of CITA – ie, no adjustment in the Dutch tax basis to the arm’s length value for assets and liabilities transfers to the extent that no corresponding adjustment is taken into account in the transferor’s profit tax base; and • Article 8bd of CITA – ie, applicable to con - tributions, distributions, and (de)mergers, pursuant to which the Dutch CIT base is at maximum (for assets) or at minimum (for liabilities) the value included in the transferor’s tax base).
Also, the legislation contains a transitional rule which limits the amount of depreciation of a Dutch taxpayer on asset transfers that would have been affected by this legislation with ret - roactive effect to such transfers that took place between 1 July 2019 and 1 January 2022. In practice, the (non-)applicability of Article 8bd of CITA led to significant uncertainty for taxpayers on the Dutch tax consequences of contributions, especially those involving entities that are disregarded for US tax purposes and exempt entities. On 31 January 2025, the Dutch Tax Authorities (DTA) published the third helpful Knowledge Group (KG) Position on the scope of Article 8bd of CITA. The literal wording of the article led to uncertainty as to whether Dutch parent companies could be adversely impacted in cases of deemed dividend distributions due to non-arm’s length transactions between two foreign subsidiaries. The third KG Position clari - fies that such deemed dividend distributions, in the view of the KG, do not result in the acquisi - tion ( verkrijging ) of an asset by the Dutch parent company and are, therefore, not in scope of the transfer pricing mismatch legislation. The first two KG Positions concerned the contribution of impaired receivables, which were also not con - sidered in scope of the transfer pricing mismatch legislation. KG Positions contain the DTA’s interpretation of the tax aspects of specific issues that were presented to the respective KG. They constitute the policy of the DTA. Based on the principle of legitimate expectations ( vertrouwensbeginsel ), taxpayers can rely on them as of their publica - tion date. Following the publication of the latest KG Posi - tion on 31 January 2025, a total of three KG Positions have now been issued concerning
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