In a global business environment where borders are less important for conducting business, tax authorities and other stakeholders have become more stringent when reviewing compliance with increasingly detailed transfer pricing regulations, strict documentation requirements and deadlines, while adopting a more rigorous approach to imposing penalties for non-compliance. Transfer pricing has therefore become an important issue for many businesses. KPMG Meijburg & Co’s experienced transfer pricing professionals can assist you in effectively managing transfer pricing and related tax risks.
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As part of KPMG’s Global Transfer Pricing Services network of more than 2500 transfer pricing professionals, our transfer pricing professionals based in Amstelveen, Rotterdam and Eindhoven offer a full range of transfer pricing services, including value chain management reviews, reviewing and preparing transfer pricing at the local or international level, benchmarking, operational transfer pricing and its implementation, valuation analyses, assistance with obtaining bilateral or unilateral advance pricing agreements, advice on how to deal with the competent tax authorities, tax audits and litigation.
Links & Downloads
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Global Transfer Pricing Review
Comprehensive information covering more than 100 countries and feedback on more than 200 questions covering local transfer pricing rules and regulations
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Flyer Master File Local File
Are your processes still in compliance with Dutch Transfer Pricing Documentation requirements?
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Exploring Transfer Pricing Podcast series
Take a listen and stay updated! in this podcast series, a KPMG manager asks senior transfer pricing professionals the questions on her mind.
FAQ
What are the 5 methods of transfer pricing?
- Comparable Uncontrolled Price (CUP) Method
Compares the price of goods or services in a controlled transaction with the price in a comparable uncontrolled transaction. - Resale Price Method
Determines the price by subtracting an appropriate margin from the resale price to an independent party. - Cost Plus Method
Adds a profit markup to the costs of the product or service, based on comparable uncontrolled transactions. - Transactional Net Margin Method (TNMM)
Analyzes the net profit margin from a controlled transaction and compares it to margins in comparable uncontrolled transactions. - Profit Split Method
Divides the combined profit or loss of related entities in an economic manner, often used in integrated operations.
These methods help determine fair prices for transactions between related entities within multinational companies.
What are the different types of transfer pricing?
Transfer pricing refers to the prices applied to transactions between related entities within a multinational enterprise. There are different types of transfer pricing, depending on the nature of the transactions:
- Goods
Prices for the sale of physical products between different parts of an enterprise, such as raw materials or finished goods. - Services
Prices for services provided between related entities, such as management, IT support, or marketing services. - Intellectual Property
Prices for the use of intellectual property, such as patents, trademarks, and technologies. - Financial Transactions
Prices for financial services and transactions, such as loans and guarantees between related entities. - Cost Allocation
Prices for allocating shared costs, such as administrative expenses or research and development costs, to different parts of the enterprise.
Each type requires specific attention to comply with regulations and minimize tax risks.
What is the arm's length principle in the Netherlands?
The arm's length principle in the Netherlands requires that transactions between related entities be conducted as if they were between independent parties. This means that the terms, such as the price, must be comparable to those of unrelated entities under similar circumstances. The aim is to ensure fair taxation and prevent artificial profit shifting to countries with lower taxes. Taxpayers must maintain documentation to demonstrate that their transactions comply with this principle. Non-compliance can lead to adjustments and penalties by the tax authorities.
What is an example of an arm's length transaction?
An arm's length transaction is when a Dutch subsidiary sells goods to a sister company in Germany at a price comparable to that offered to an independent party. For example, if the Dutch company sells laptops to an unrelated German retailer, the price to the sister company should be similar, taking into account equal sales conditions. This prevents artificial profit shifting and ensures fair taxation in both countries.
