Transfer Pricing

Documentation
in the
Netherlands:
Master File &
Local File
July 2023
Are your processes still in compliance with Dutch
Transfer Pricing Documentation requirements?
Transfer Pricing Documentation
Dutch statutory transfer pricing
documentation requirements
Having adequate and robust Transfer Pricing
documentation has become increasingly important 1. Contemporaneous transfer pricing
documentation required
in order to meet local annual compliance obligations,
while also describing and substantiating the arm’s 2. Master File and Local File
length nature of the applied Transfer Pricing policies. 3. Master File and Local File, Country-by-Country
Since the introduction of the Master File, Local File Report
and Country-by-Country reporting concepts, the
compliance requirements of multinational groups
have increased considerably. Multinational groups
are faced with questions like how to set up this
documentation as efficiently as possible, how to
keep the documentation up-to-date and consistent Consolidation group revenue (EURm)
across the group, and how to ensure it is prepared
>750
and filed in time.

All Dutch entities, that transact with related parties,

50-750
are obliged to prepare Transfer Pricing
documentation that describes how transfer prices
have been established and substantiate the at arm’s
length nature of the transfer prices. <50

1 2 3
Master File and Local File
Documentation requirements
For internationally operating businesses (MNEs)
with a consolidated group turnover of at least
EUR 50 million, such documentation must consist of
the Master File and the Local File. If the group
meets this turnover threshold, the Master File and Deadlines
Local File requirements apply, regardless of the size
of the Dutch business or volume of its intercompany The Master file and the Local file/ General Transfer
transactions. Pricing Documentation must be included in the
administration of the taxpayer and be filed with the
In case a group does not meet the Master File/Local Dutch Tax Authorities upon request.
File thresholds, local documentation should still be
prepared based on the general Transfer Pricing Both the Master File and the Local File of a group
Documentation requirements in the Netherlands. member, that is subject to tax in the Netherlands,
must be available at the moment the Dutch
Country-by-Country reporting taxpayer is required to file its corporate income tax
In addition, MNEs with a consolidated turnover return for the same year. Many Dutch taxpayers
exceeding EUR 750 million are obliged to file an receive an extension on filing of their income tax
annual Country-by-Country (CbC) report with the returns, thereby also receiving an extension for the
Dutch Tax Authorities within 12 months after the preparation of the Master File and the Dutch Local
reporting year. File as well.

© 2023 Meijburg & Co | 2

Taxpayers are required to prepare Transfer Pricing A sound process, including good planning and
documentation contemporaneous with the annual oversight is therefore necessary in order to avoid
corporate income tax return to ascertain that the penalties or other adverse consequences.
correct positions in terms of Transfer Pricing are
taken in the corporate income tax return. An Country-by-Country reporting
incorrect corporate income tax return may result in
reversal of the burden of proof regarding that tax MNEs with a consolidated turnover exceeding
return. EUR 750 million are obliged to file an annual CbC
report with the Dutch Tax Authorities within 12
Content of the general Transfer Pricing months after the reporting year. The filing obligation
Documentation rests with the ultimate parent company, a
designated surrogate parent company or in
The form of the General Transfer Pricing exceptional cases the respective local entities. The
Documentation is free but its content must follow CbC report contains an overview per country of
the guidance of the OECD Transfer Pricing aggregate information relating to the amount of
Guidelines. Transfer pricing method selection, revenue, profit (or loss) before income tax, income
industry, functional, comparability and company tax paid, number of employees, etc. The report
analyses are recommended to evaluate the arm’s should be submitted electronically in XML format.
length nature of the transfer prices applied between
Please note that there are also upcoming initiatives
related parties.
on public CbC reporting. We will gladly inform you of
Content of the Master File and the Local these initiatives separately.

File There is an annual requirement to notify the Dutch

tax authorities about the group entity that will
The content of the Master File and the Local File
submit the CbC report for the group.
according to Dutch standards is generally in line
with the OECD requirements for Master File and Not meeting the CbC reporting requirements may
Local File. result in significant administrative penalties.

The information required is reflected further in this

publication. MNEs may or may not have these data How Meijburg & Co can help
items readily available, and direct availability per
Our Transfer Pricing Documentation services
item is likely to vary from taxpayer to taxpayer. The
range from identifying potential risks and
data items have been colour coded by likely
shortcomings when reviewing documentation
availability based on our experience.
prepared inhouse, to complete documentation
The Master file and the Local file / General Transfer management where we relieve the in-house
Pricing Documentation may be prepared in Dutch or team and assist in meeting the documentation
English language. requirements while using technology where this
adds value.
Non-compliance Transfer Pricing
In collaboration with you, we will assess which
documentation parts of the documentation process you would
For the Master File, the Local File and the General like to take care of yourself, and which parts can
Transfer Pricing Documentation, non-compliance be handled by our dedicated transfer pricing
may ultimately result in a reversal of the burden of experts. This integrated approach results in
proof regarding the at arm’s length nature of the compliant Transfer Pricing documentation,
transfer prices applied by the taxpayer. In certain which combines your business know-how and
cases of non-compliance with applicable Transfer market intelligence with our professional
Pricing requirements, monetary fines and other knowledge and experience.
sanctions may be imposed.

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Network and experience beyond
borders

Many jurisdictions implemented deadlines for

(preparing and submitting) the Master File, Local File
and/or General Transfer Pricing Documentation as
well as CbC reporting obligations. For certain
countries, there are additional local Transfer Pricing
documentation or disclosure requirements to be
met.

Meijburg & Co can assist you with planning and

preparing Transfer Pricing documentation for the
Netherlands and abroad. Depending on your needs,
we can work together with foreign transfer pricing
specialists of KPMG’s Global Transfer Pricing
Services network to ensure compliance with local
requirements.

Transfer Pricing Documentation

Technology

Meijburg & Co can support you with preparing

Transfer Pricing documentation by using tools or
automation options that fit your needs. We can use
our own KPMG tax technology tools, tax technology
tools developed by our partners or assist you with
Transfer Pricing documentation add-ons for the
technology that your business already uses. Next to
technology for efficiently preparing Transfer Pricing
documentation, we can also supply a platform to
visualize the documentation requirements and
status and monitor deadlines. Data gathering and
data processing for the Transfer Pricing
documentation can also be facilitated with the use
of technology and automation opportunities.

Our tax technology approach is scalable and can be

adjusted depending on your needs and the size of
your business.

© 2023 Meijburg & Co | 4

Information necessary for
 Data items that are likely already available for many companies
 Data items that may be available or partially available for many
companies
 Data items that are likely unavailable at present (new information

Master File and Local File (1) requests that go beyond traditional documentation requirements)
for many companies

Master File – Your company’s readiness

Data item Description
1 Organisational a. Chart illustrating the MNE’s legal and ownership structure and geographical location of
operating entities.
structure
2 Description of a. Important drivers of business profit.
MNE’s
business(es) b. A description of the supply chain for the group’s five largest products and/or service offerings
by turnover plus any other products and/or services amounting to more than 5 percent of group
turnover. The required description could take the form of a chart or a diagram.

c. A list and brief description of important service arrangements between members of the MNE
group, other than research and development (R&D) services, including a description of the
capabilities of the principal locations providing important services and transfer pricing policies
for allocating services costs and determining prices to be paid for intragroup services.

d. A description of the main geographic markets for the group’s products and services that are
referred to in the second bullet point above.

e. A brief written functional analysis describing the principal contributions to value creation by
individual entities within the group, i.e., key functions performed, important risks assumed, and
important assets used.

f. A description of important business restructuring transactions, acquisitions and divestitures

occurring during the fiscal year.

3 MNE’s a. A general description of the MNE’s overall strategy for the development, ownership and
exploitation of intangibles, including location of principal R&D facilities and location of R&D
intangibles (as
management.
defined in
Chapter VI of
these b. A list of intangibles or groups of intangibles of the MNE group that are important for transfer
pricing purposes and which entities legally own them.
Guidelines)
c. A list of important agreements among identified associated enterprises related to intangibles,
including cost contribution arrangements, principal research service agreements and licence
agreements.

d. A general description of the group’s transfer pricing policies related to R&D and intangibles.

e. A general description of any important transfers of interests in intangibles among associated

enterprises during the fiscal year concerned, including the entities, countries, and
compensation involved.

4 MNE’s a. A general description of how the group is financed, including important financing arrangements
with unrelated lenders.
intercompany
financial
activities b. The identification of any members of the MNE group that provide a central financing function
for the group, including the country under whose laws the entity is organised and the place of
effective management of such entities.

c. A general description of the MNE’s general transfer pricing policies related to financing
arrangements between associated enterprises.

5 MNE’s a. The MNE’s annual consolidated financial statement for the fiscal year concerned if otherwise
prepared for financial reporting, regulatory, internal management, tax or other purposes.
financial and
tax positions
b. A list and brief description of the MNE group’s existing unilateral advance pricing agreements
(APAs) and other tax rulings relating to the allocation of income among countries.

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Information necessary for
 Data items that are likely already available for many companies
 Data items that may be available or partially available for many
companies
 Data items that are likely unavailable at present (new information

Master File and Local File (2) requests that go beyond traditional documentation requirements)
for many companies

Local File – Your company’s readiness

Data item Description
1 Local entity a. A description of the management structure of the local entity, a local organisation chart, and a
description of the individuals to whom local management reports and the country(ies) in which
such individuals maintain their principal offices.
b. A detailed description of the business and business strategy pursued by the local entity
including an indication whether the local entity has been involved in or affected by business
restructurings or intangibles transfers in the present or immediately past year and an
explanation of those aspects of such transactions affecting the local entity.
c. Key competitors.

2 Controlled a. A description of the material controlled transactions (e.g., procurement of manufacturing

services, purchase of goods, provision of services, loans, financial and performance
transactions guarantees, licences of intangibles, etc.) and the context in which such transactions take place.
For each
b. The amount of intra-group payments and receipts for each category of controlled transactions
material involving the local entity (i.e., payments and receipts for products, services, royalties, interest,
category of etc.) broken down by tax jurisdiction of the foreign payor or recipient.
controlled
c. An identification of associated enterprises involved in each category of controlled transactions,
transactions in and the relationship amongst them.
which the entity
d. Copies of all material intercompany agreements concluded by the local entity.
is involved,
provide the e. A detailed comparability and functional analysis of the taxpayer and relevant associated
following enterprises with respect to each documented category of controlled transactions, including any
changes compared to prior years (to the extent this functional analysis duplicates information in
information:
the master file, a cross-reference to the master file is sufficient).
f. An indication of the most appropriate transfer pricing method with regard to the category of
transaction and the reasons for selecting that method.
g. An indication of which associated enterprise is selected as the tested party, if applicable, and
an explanation of the reasons for this selection.
h. A summary of the important assumptions made in applying the transfer pricing methodology.

i. If relevant, an explanation of the reasons for performing a multi-year analysis.

j. A list and description of selected comparable uncontrolled transactions (internal or external), if

any, and information on relevant financial indicators for independent enterprises relied on in the
transfer pricing analysis, including a description of the comparable search methodology and the
source of such information.
k. A description of any comparability adjustments performed, and an indication of whether
adjustments have been made to the results of the tested party, the comparable uncontrolled
transactions, or both.
l. A description of the reasons for concluding that relevant transactions were priced on an arm’s
length basis based on the application of the selected transfer pricing method.
m. A summary of financial information used in applying the transfer pricing methodology.

n. A copy of existing unilateral and bilateral/multilateral APAs and other tax rulings to which the
local tax jurisdiction is not a party and which are related to controlled transactions described
above.

3 Financial a. Annual local entity financial accounts for the fiscal year concerned. If audited statements exist
they should be supplied and if not, existing unaudited statements should be supplied.
information
b. Information and allocation schedules showing how the financial data used in applying the
transfer pricing method may be tied to the annual financial statements.

c. Summary schedules of relevant financial data for comparables used in the analysis and the
sources from which that data was obtained.
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Contact
For more information about these services
or assistance with assessing your
company’s readiness in meeting the
transfer pricing documentation
requirements in the Netherlands and
abroad, please contact your regular
Meijburg & Co contact.

www.Meijburg.com

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although
we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or
that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough
examination of the particular situation.

All activities performed and all services rendered by Meijburg & Co are subject to its general terms and conditions filed with the Dutch Chamber of
Commerce. Meijburg & Co is a partnership of limited liability companies under Dutch law, registered in the Commercial Register under number
53753348 and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private
English company limited by guarantee. The general terms and conditions are available on the Meijburg & Co website
(http://www.meijburg.com/termsandconditions) and will be supplied upon request.