Transfer pricing documentation and country-by-country reporting

By Robin de Raad, Zirkzee Group

As a result of BEPS Action 13, The Netherlands released tax law regarding transfer pricing (TP) documentation on January 1 2016. Under the new legislation, multinational enterprises (MNEs) with a minimum consolidated turnover of EUR 50 million will have to deal with a three-tiered approach to TP documentation: master file, local file and country-by-country report.

SMEs have less comprehensive requirements with regard to TP documentation. At least the Dutch administration should state how the intercompany transactions are determined to be at arm’s length.

Master file and local file

Dutch members of a MNE group should have a master file and local file available at the level of the Dutch entity when filing the corporate income tax return. The master file should provide an overview of the MNE group business, including but not limited to:

  • The nature of business activities;
  • An overview of the supply chain for group’s five largest products;
  • The general TP policy.

The local file provides information relevant to the TP analysis of intercompany transactions between the Dutch entity and its foreign group companies.

Country-by-country report

The country-by-country requirements are applicable to Dutch tax resident entities within a MNE group with a minimum consolidated group turnover of EUR 750 million. They are treated as a risk assessment tool for tax administrations and should be used to assess the accuracy of the applicable TP policy within the MNE group.

Robin de Raad

Robin de Raad

Zirkzee Group, Noordwijk, The Netherlands
T: +31 71 572 49 65
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Robin de Raad is a registered tax advisor with an eye for innovative tax solutions for companies and individuals.

Zirkzee Group is the professional partner for financial and fiscal matters. As a proactive, critical and reliable partner, they offer a one-stop shop for all financial, taxation and administrative matters to individuals, small and medium-sized enterprises active in both the profit and non-profit sectors. As a top 75 accountancy and tax law firm in The Netherlands, they enable their clients to focus on their core business. As one of the few firms in The Netherlands, the tax authorities allow them to implement and use the 30% rule immediately based on professional judgment.

Published: October 2016 l Photo:


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