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Netherlands Confirms CbC Reporting From 2016

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by Ulrika Lomas,, Brussels
17 September 2015

Through Wetsvoorstel Overige Fiscale Maatregelen 2016, released on September 15, the Netherlands has confirmed the introduction of a new country-by-country (CbC) reporting obligation for multinational corporations.

These regulations provide for the implementation of the recommendations of the Organisation for Economic Co-operation and Development (OECD) on transfer pricing documentation under Action 13 of its base erosion and profit shifting (BEPS) project.

The regulations would require Dutch companies to file a CbC report if the group's net turnover is EUR750m (USD820m) or more. In some limited circumstances, a subsidiary or permanent establishment of the group will instead be required to prepare the CbC reports. Certain large entities will be required to prepare documentation in line with the OECD's proposals for a "local file" (referring specifically to material transactions of the local taxpayer) and "master file" (containing standardized information relevant for all MNE group members) under Action 13 of its BEPS Action Plan.

The reforms will mean that groups may now need to disclose detailed information on: the nature and value of transactions with related parties; revenues before tax; tax payments; intangible assets and their ownership; any advance pricing agreements secured; significant intra-group transactions concerning intangibles that occurred during the reporting period; strategies to develop intangible assets and the location of research and development activities; the group's transfer pricing policies; and other financial activities, among other things.

On June 8, 2015, the OECD released a package of measures for the implementation of the new CbC reporting plan developed under the BEPS project to facilitate a consistent and swift implementation of new transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan, ensuring that tax administrations obtain a complete understanding of the way multinational enterprises structure their operations, while also ensuring that the confidentiality of such information is safeguarded.

The new reporting requirement shall apply to financial years beginning on or after January 1, 2016.