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Wednesday, September 16, 2015

BEPS - Country by Country report also implemented in the Netherlands

On the 15th of September 2015 the Dutch legislator announced new Dutch reporting standards for the Dutch Corporate Income Tax Act. The annual TP documentation package should consist of a master file and a local country file (Dutch or English language).

The report is used to assess material transfer pricing risks and other risks that relate to base erosion and profit shifting and monitor possible non-compliance to transfer pricing rules by members of the group.

The reporting standard is intended for intercompany transactions with more than €50 million annual revenues. Further Country by Country (CbC) reporting requirements are also included with an treshold of €750 million. A penalty is included as well.

The report will be mandatory per January 2016 due to obligations with OESO /G20.

The Dutch Ministry of Finance will issue a decree at a later stage that provides more detailed rules about form and content of the master file, local file and CbC-reporting.

Specific penalties for non-compliance

Not being compliant with submission the CbC report qualifies as a criminal offense. Non-compliance will lead to a monetary fine as of 1 January 2014: €8,100) or custody of six months at the most for the party involved.

In case non-compliance occurs intentionally, then a fine of the fourth category applies in addition to an imprisonment of four years at the most. The authority to levy an administrative penalty will expire five years after the end of the calendar year in which the requirement originated. Criminal prosecution will generally be reserved for the most serious cases.

Relevant chapters:
  1. The changing tax world and taxpayer's impact
  2. Developing a common framework for disclosing tax information
  3. Tax Trends

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