Netherlands: Country-by-country reporting | KPMG | BE

Netherlands: Country-by-country reporting, 2016 notification deadline is extended

Netherlands: Country-by-country reporting

The Dutch Deputy Minister of Finance on 21 November 2016 issued a policy statement granting Dutch subsidiaries of multinational enterprises (MNEs) that are subject to country-by-country (CbC) reporting a one-off extension for filing the 2016 CbC reporting notification. The new deadline is 1 September 2017.

1000

Related content

Extension

Based on the additional transfer pricing documentation requirements that took effect 1 January 2016 (i.e., implementation of the OECD BEPS Action 13 Final Report; read a 2016 report), a Dutch group entity of an MNE with a minimum consolidated group turnover of €750 million, and that is a tax resident in the Netherlands, must notify the tax inspector, at the latest on the last day of the reporting fiscal year whether:

  • It is the reporting “ultimate parent entity” or “surrogate parent entity” and if not,
  • The identity of the reporting entity (i.e., the tax identification number) and its tax residence

As a consequence, taxpayers with a financial year equal to a calendar year would have to file the notification for 2016 no later than 31 December 2016. However, the new policy statement extends the notification deadline until 1 September 2017. No extension has been granted to MNEs with a reporting fiscal year ending after 31 August 2017.

Background

The extension was granted because it is currently unclear which countries will have final CbC legislation in place and which countries will have a reciprocal relationship for the automatic exchange of information based on the Multilateral Competent Authorities Agreement (MCAA) for CbC reporting. The MCAA CbC reporting builds on the “Convention on Mutual Administrative Assistance in Tax Matters” as developed jointly by the OECD and the Council of Europe in 1988 and amended by a Protocol in 2010. 

According to Article 8 of the MCAA CbC, countries that have signed the MCAA will still need to notify the OECD about those countries with which they wish to exchange CbC reporting information. The OECD expects this notification process to take until 1 July 2017. The matching process following these notifications is expected to take two months. As such, the extension date has been set at 1 September 2017, in order to avoid CbC reporting notifications having to be corrected as a result of the outcome of this process.

KPMG observation

In view of the uncertainty surrounding the implementation of final CbC reporting legislation in time for the 2016 fiscal year and the reciprocity of the exchange of CbC reporting information between countries, the Netherlands has now extended the deadline for filing the CbC reporting notification. However, as quite a few countries still have 31 December 2016 (or the last day of the reporting fiscal year) as the notification deadline, MNEs need to consider all relevant notification deadlines and where they will file their CbC reports in case a surrogate parent company’s filing is required for 2016 and/or later years.

Announcement—Notification tool and voluntary filings

In the same policy statement, the Deputy Minister of Finance announced that guidance will soon be issued for the Dutch tax authorities’ online CbC reporting notification tool and voluntary CbC reporting filing.

KPMG observation

The Deputy Minister has more specifically announced that he intends to make the online CbC reporting notification tool compulsory. This could mean that notifications that have already been filed, or that will be emailed before the online tool is available, will have to be re-submitted via the online tool. 

With respect to voluntary filings (e.g., in Japan, the United States, or Switzerland), the current position is that the Netherlands cannot accept voluntary filings because Dutch legislation would require a CbC reporting “requirement” in the country of the reporting entity. However, the Deputy Minister of Finance announced that he intends to present a proposal to accept voluntary filings. This issue may also arise in other countries that have implemented final CbC reporting legislation based on the OECD BEPS Action 13 Final Report, before the additional guidance on the implementation of CbC reporting issued in June 2016 and by which the OECD allows voluntary parent surrogate filing. 

 

For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in the Netherlands:

Jaap Reyneveld | reyneveld.jaap@kpmg.com

Jeroen Dijkman | dijkman.jeroen@kpmg.com

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit