The Netherlands - Response to BEPS

The Netherlands - Response to BEPS

Within the Netherlands, the OECD BEPS project continues to capture a good deal of public, media and parliamentary attention. With the spotlight on the taxation of multinationals, companies are increasingly weighing risks versus opportunities, including assessing potential reputational damage relating to international tax planning.

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For the most part, the Netherlands is waiting for the final OECD recommendations to reform its own regulations, including its transfer pricing rules and anti-hybrid provisions. Representatives of the Dutch government actively and constructively participate in the various OECD and EU initiatives.

Treaties with emerging countries

The debate in Parliament and in the press is largely focused on tax treaty policy relating to developing countries and on supporting capacity building within tax administrations in developing countries. As a result of this debate, the Netherlands approached 23 tax treaty (developing) countries to explore amendments to existing treaties toinclude enhanced anti-abuse provisions. To date, treaty negotiations with six of these countries have been concluded.


Dutch tax authorities are monitoring BEPS discussions in both the EU and the OECD and are keen to retain the country’s reputation for business friendliness while ensuring a level playing field. At the same time, the Netherlands is seeking to emphasize its own tax transparency. In particular, in light of the intense publicity surrounding the EC’s investigation into the tax ruling practices of the Dutch and other tax authorities, the Netherlands has been eager to show that its dealings with taxpayers are above board.

In July 2015, the Netherlands signed an agreement with Germany for the spontaneous exchange of information on advance tax rulings and unilateral advance pricing arrangements (APA) that impact on the other state. This agreement comes on the heels of the EC's March 2015 proposal for a directive on automatic exchange of rulings between EU member states. The EC's Economic and Financial Affairs Council adopted the proposal on 6 October 2015, with the Netherlands' strong support.

Country-by-country reporting

The Netherlands favors multilateral rules that apply equally to all countries and supports the OECD initiative on CbyC reporting to tax authorities. In a May 2015 letter1 to the European Commissioner, the Dutch Secretary of Finance also expressed support for the EC’s consultation on CbyC reporting requirements for banks and extractive industries to all multinationals. The letter encourages the EC to put priority on its impact assessment regarding this proposal.

Furthermore, in September 2015, the Dutch government proposed draft legislation in order to implement the OECD BEPS action point 13 (CbyC reporting) from January 2016.

Dutch Innovation Box

The Dutch government supported the 2014 agreement between the UK and Germany to strengthen substance requirements in the rules governing patent and innovation box regimes.

The substance requirements were included in the final OECD BEPS recommendations and the Netherlands is committed to introducing these recommendations in its domestic law in the course of 2016.

Treaty abuse

Several years ago, the Netherlands took measures prohibiting the issuance of tax residence certificates for companies in situations where, in the Dutch view, the application of the tax treaty to income payable from source countries to the Netherlands could be unjustified. This policy also includes exchange of information with source countries where, in the Dutch view, the application of the tax treaty could be unjustified.

Recently, the law was changed to expand reporting obligations on ‘substance’ to the Dutch tax authorities that can, under certain circumstances, be spontaneously exchanged with tax treaty countries.

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