The call for worldwide transparency has consequences for your company’s tax position. Acting on non-commercial conditions within the same group of companies opens up the possibility of taxable profits being deposited with those group members where these profits are taxed at a low level or not at all, for example in the case of an entity with losses available for set-off or an entity that has its registered office in a country with a lower effective tax burden. Especially due to the OECD’s Base Erosion and Profit Shifting (BEPS) project, transfer pricing is becoming increasingly important for companies operating internationally.
Dutch law prescribes that taxpayers’ profits from legal relationships with affiliated parties must be calculated on an arm’s length basis. This basis is also known as the “arm’s length principle”: the conditions between affiliated parties must be the same as the conditions on which independent parties would agree in comparable transactions under comparable circumstances.
We can help you substantiate the transfer prices. If you wish to have advance certainty about the transfer prices to be used, VanLoman can guide you through this process with the Dutch Tax and Customs Administration. We can also assist you if the Dutch Tax and Customs Administration does not accept the transfer prices used.
If you require any further information, feel free to contact me on 06 2903 1814.