The Dutch Ministry of Finance on December 4, 2024, issued a decree on the implementation of the OECD’s Pillar 1 Amount B, an intended transfer pricing simplification for baseline distribution and marketing activities aimed at increasing tax certainty and reducing tax disputes.
The key takeaways can be summarised as follows:
The Netherlands will not implement Amount B for Dutch taxpayers who perform baseline marketing and distribution in the Netherlands. However, Amount B may be relevant to the tax position of Dutch taxpayers, as the Netherlands has committed to preventing double taxation in relation to Amount B, if that should be applied by so-called “covered jurisdictions.”
Therefore, if, in the relevant year, Amount B has been implemented in the local law, of a “covered jurisdiction,” and the Netherlands has entered into is a double tax treaty with that jurisdiction, the Dutch tax authorities will provide a unilateral adjustment to mitigate double taxation occurring as a result of the accurate application of Amount B in a related-party transaction with a Dutch taxpayer.
The Dutch Competent Authority will apply the same in the event that a mutual agreement procedure is requested in relation to application of Amount B by a covered jurisdiction.
The Dutch tax authorities will not impose transfer pricing adjustments in relation to the remuneration of a baseline marketing and distribution company in a covered jurisdiction.
The above applies to related-party transactions, as well as to the allocation of profits to permanent establishments.
Whether or not a country qualifies as a covered jurisdiction is determined based on a set of criteria. The OECD maintains a list of countries that qualify. Currently, there are 66 countries on the list, and the Netherlands has entered into double tax treaties with fewer than half of those.
Eefje Lemmens
BDO in Netherlands
The key takeaways can be summarised as follows:
The Netherlands will not implement Amount B for Dutch taxpayers who perform baseline marketing and distribution in the Netherlands. However, Amount B may be relevant to the tax position of Dutch taxpayers, as the Netherlands has committed to preventing double taxation in relation to Amount B, if that should be applied by so-called “covered jurisdictions.”
Therefore, if, in the relevant year, Amount B has been implemented in the local law, of a “covered jurisdiction,” and the Netherlands has entered into is a double tax treaty with that jurisdiction, the Dutch tax authorities will provide a unilateral adjustment to mitigate double taxation occurring as a result of the accurate application of Amount B in a related-party transaction with a Dutch taxpayer.
The Dutch Competent Authority will apply the same in the event that a mutual agreement procedure is requested in relation to application of Amount B by a covered jurisdiction.
The Dutch tax authorities will not impose transfer pricing adjustments in relation to the remuneration of a baseline marketing and distribution company in a covered jurisdiction.
The above applies to related-party transactions, as well as to the allocation of profits to permanent establishments.
Whether or not a country qualifies as a covered jurisdiction is determined based on a set of criteria. The OECD maintains a list of countries that qualify. Currently, there are 66 countries on the list, and the Netherlands has entered into double tax treaties with fewer than half of those.
Eefje Lemmens
BDO in Netherlands