Harmful Tax Practices – 2022 Peer Review Reports on the Exchange of Information on Tax Rulings

Netherlands

The Netherlands has met all aspects of the terms of reference (OECD, 2021[1]) (ToR) for the calendar year 2022 (year in review), and no recommendations are made.

In the prior year report, as well as the 2020 peer review report, the Netherlands had received a recommendation regarding the timely provision of information on rulings to the Competent Authority for exchange of information (ToR II.B.5). The Netherlands has resolved this issue and therefore the recommendation is now removed.

The Netherlands can legally issue four types of rulings within the scope of the transparency framework.

In practice, The Netherlands issued rulings within the scope of the transparency framework as follows:

 

Type of ruling	Number of rulings
Past rulings	2 206
Future rulings in the period 1 April 2016 – 31 December 2016	297
Future rulings in the calendar year 2017	214
Future rulings in the calendar year 2018	272
Future rulings in the calendar year 2019	403
Future rulings in the calendar year 2020	263
Future rulings in the calendar year 2021	299
Future rulings in the year in review	234

Peer input was received from eleven jurisdictions in respect of the exchanges of information on rulings received from the Netherlands. The input was generally positive, noting that the exchanges on rulings were received in a timely manner and the information was in correct format. However, one peer indicated that the information was not presented in a correct format.

Information gathering process (ToR I.A)

858. The Netherlands can legally issue the following four types of rulings within the scope of the transparency framework: (i) preferential regimes;1 (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing for unilateral downward adjustments; (iv) permanent establishment rulings.

859. For the Netherlands, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2014 but before 1 April 2016; or (ii) on or after 1 January 2010 but before 1 January 2014, provided they were still in effect as at 1 January 2014. Future rulings are any tax rulings within scope that are issued on or after 1 April 2016.

860. In the prior years’ peer review reports, it was determined that the Netherlands’ undertakings to identify past and future rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. In addition, it was determined that the Netherlands’ review and supervision mechanism was sufficient to meet the minimum standard. The Netherlands’ implementation remains unchanged, and therefore continues to meet the minimum standard.

861. The Netherlands has met all of the ToR for the information gathering process and no recommendations are made.

Exchange of information (ToR II.B)

Legal basis for spontaneous exchange of information (ToR II.B.1, II.B.2)

862. The Netherlands has the necessary domestic legal basis to exchange information spontaneously. The Netherlands notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

863. The Netherlands has international agreements permitting spontaneous exchange of information, including: (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”), (ii) the Directive 2011/16/EU with all other European Union Member States and (iii) bilateral agreements in force with 95 jurisdictions.2

Completion and exchange of templates (ToR II.B.3, II.B.4, II.B.5, II.B.6, II.B.7)

864. In the prior years’ peer review reports, it was determined that the Netherlands’ process for the completion and exchange of templates met all the ToR, except for the timely provision of information on rulings to the competent authority for exchange of information (ToR II.B.5). Therefore, the Netherlands was recommended to ensure that information is made available to the competent authority without undue delay.

865. The Netherlands indicates that it has taken steps to address this issue. As of 1 January 2022, a ruling can only be issued once all information to complete the Annex C template is available. In addition, all templates need to be sent to the Competent Authority every two months. The Netherlands has not reported any delays for the year in review and therefore, the recommendation is now removed.

866. For the year in review, the timeliness of exchanges is as follows:

 

Future rulings within the scope of the transparency framework	Number of exchanges transmitted within three months of the information becoming available to the competent authority or immediately after legal impediments have been lifted	Delayed exchanges
		Number of exchanges transmitted later than three months of the information on rulings becoming available to the competent authority	Reasons for the delays	Any other comments
	829	0	N/A	N/A

 

Follow-up requests received for exchange of the ruling	Number	Average time to provide response	Number of requests not answered
	0	N/A	N/A

Conclusion on section B

867. The Netherlands has the necessary legal basis for spontaneous exchange of information, a process for completing the templates in a timely way and has completed all exchanges. The Netherlands has met all of the ToR for the exchange of information process and no recommendations are made.

Statistics (ToR IV.D)

868. The statistics for the year in review are as follows:

 

Category of ruling	Number of exchanges	Jurisdictions exchanged with
Ruling related to a preferential regime	607	Argentina, Aruba, Australia, Bangladesh, Belgium, Bosnia and Herzegovina, Brazil, Brunei Darussalam, Canada, Chile, China (People’s Republic of), Curaçao, Colombia, Costa Rica, Czechia, Denmark, Dominican Republic, Ecuador, Egypt, El Salvador, Ethiopia, Finland, France, Germany, Ghana, Hong Kong (China), Iceland, India, Indonesia, Israel, Italy, Jamaica, Japan, Jersey, Jordan, Kazakhstan, Kenya, Korea, Lebanon, Lithuania, Malaysia, Mauritius, Mexico, Moldova, Morocco, New Zealand, Nigeria, North Macedonia, Norway, Oman, Pakistan, Panama, Peru, Philippines, Poland, Portugal, Puerto Rico, Saint Lucia, Saudi Arabia, Serbia, Singapore, South Africa, Sri Lanka, Suriname, Sweden, Switzerland, Chinese Taipei, Thailand, Tunisia, Türkiye, Uganda, United Kingdom, United States, Uruguay, Viet Nam, Zambia
Cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles	210	Argentina, Australia, Bosnia and Herzegovina, Brazil, Canada, Chile, China (People’s Republic of), Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Ghana, Guatemala, Hong Kong (China), Iceland, India, Indonesia, Israel, Japan, Jordan, Kazakhstan, Kenya, Korea, Malaysia, Mauritius, Mexico, Monaco, Morocco, New Zealand, Nigeria, Norway, Panama, Peru, Philippines, Puerto Rico, Saudi Arabia, Singapore, South Africa, Sri Lanka, Switzerland, Chinese Taipei, Thailand, Tunisia, Türkiye, United Kingdom, United States, Uruguay, Viet Nam
Cross-border rulings providing for a unilateral downward adjustment to the taxpayer’s taxable profits that is not directly reflected in the taxpayer’s financial / commercial accounts	01	N/A
Permanent establishment rulings	12	Curaçao, Singapore, Switzerland, United Kingdom, United States
Related party conduit rulings	0	N/A
IP regimes: total exchanges on taxpayers benefitting from the third category of IP assets, new entrants benefitting from grandfathered IP regimes; and taxpayers making use of the option to treat the nexus ratio as a rebuttable presumption	Included in ‘rulings related to a preferential regime’	N/A
Total	829

1. From 1 July 2019, a new ruling policy is in place which no longer allows rulings with regard to unilateral downward adjustments to be concluded.

Matters related to intellectual property regimes (ToR I.A.1.3)

869. In the prior years’ peer review reports, it was determined that the Netherlands’ information gathering and exchange of information processes for matters related to intellectual property regimes3 were sufficient to meet the minimum standard. The Netherlands’ implementation in this regard remains unchanged and therefore continues to meet the minimum standard.

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

References

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, https://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.