NETHERLANDS TRENDS AND DEVELOPMENTS Contributed by: Jan-Willem Kunen, Natalie Reypens and Gijs van Koeveringe, Loyens & Loeff
for the application of an approximation of the arm’s length principle to baseline marketing and distribution activities (BMDA). Amount B provides a pricing framework which includes a three-step process to determine a return on sales (RoS) for in-scope wholesale distribution of goods. Jurisdictions can choose to apply Amount B for fiscal years beginning on or after 1 January 2025. There is no minimum revenue threshold for the application of Amount B. The S&S Approach, as included in the Pillar One Amount B Report of February 2024 (the “Report” ), is incorporated as an annex to Chap - ter IV of the OECD Transfer Pricing Guidelines and aims to reduce the compliance burden and to efficiently resolve disputes in respect of BMDA. Following the guidance that was pub - lished by the OECD Inclusive Framework (IF) on 17 June 2024 (the “June Guidance” ), members of the IF commit to respect remuneration out - comes under the S&S Approach when applied by any of the “Covered Jurisdictions” . The defi - nition Covered Jurisdictions generally refers to low-income and middle-income IF countries. On 4 December 2024, the Dutch State Secretary of Finance (the “State Secretary” ) published a decree (the “Amount B Decree” ), outlining the Dutch implementation of Amount B. With the issuance of the Amount B Decree, the State Secretary outlines the Dutch implementation of the S&S Approach as formulated in the June Guidance. Pursuant to the Amount B Decree, the S&S Approach will not be introduced for BMDA per - formed in the Netherlands. However, the out - come of the S&S Approach will, under certain conditions, be accepted for Dutch taxpayers that are involved in intercompany transactions covering BMDA that are performed in Covered
Jurisdictions. The provisions in the Amount B Decree apply both to intercompany transactions and profit allocations to permanent establish - ments. The DTA will accept the outcome under the S&S Approach for the fiscal year in question if the following criteria are satisfied in that same year: • the BMDA must be performed in a Covered Jurisdiction; • the S&S Approach must be implemented in the domestic legislation of the Covered Juris - diction; • a bilateral tax treaty between the Covered Jurisdiction and the Netherlands must be applicable; and • the Covered Jurisdiction must apply the S&S Approach in accordance with the Report. Based on the Report, June Guidance, and the Amount B Decree, taxpayers can evaluate whether (i) their wholesale distribution activities fall within the scope of Amount B and (ii) their remuneration aligns with the returns outlined in the pricing matrix, taking into account any appli - cable profitability adjustments. If alignment is established, this should be incorporated in the transfer pricing documentation to mitigate the risk of potential challenges. If discrepancies with Amount B exist, a further assessment should be conducted and, where possible, a substantia - tion should be provided. Also, Dutch taxpayers that are out of scope may still use Amount B as a sanity check for the remuneration of their distribution activities and integrate such in their transfer pricing documentation. Public Country-by-Country Reporting On 14 April 2016, the European Commission published its first proposal requiring certain multinational enterprises (MNEs) to publish an
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