In many cases, it may not be crystal clear whether or not reliance can be placed on the participation exemption or whether transfer pricing procedures are correct or not. There are times that you need to be reassured. The Dutch Tax & Customs Administration understands your position and offers businesses and groups the opportunity to conclude advance tax rulings and so limit disputes. More and more foreign revenue services are prepared to conclude rulings now too.
Tax rulings: certainty in advance
A key advantage of a tax ruling is that you will have certainty about your business’s tax position. A tax ruling usually spans five years. A ruling is potentially subject to renewal, which makes it easier to manage tax risks.
- Your business does not have to free up funds to cover unexpected tax corrections.
- The risk of filing an incorrect corporate income tax return is reduced.
- Your tax position in the financial statements is easier to determine.
Advance Tax Ruling (ATR)
The Dutch Tax & Customs Administration is open to concluding tax rulings about the applicability of the participation exemption. Cross-border traders can have their international structures approved in advance. Any arrangements, for instance about whether or not the business qualifies as a permanent establishment, are formalised in an ATR.
Advance Pricing Agreement (APA): transfer pricing policies
Because of a sharp increase in focus on transfer pricing on a global level, many businesses conclude APAs with the tax authorities about the intercompany pricing of specific transactions.
Dialogue with Tax & Customs Administration
BDO offers assistance in submitting requests for tax rulings to the Dutch Tax & Customs Administration. In doing so, we determine what information is relevant. We discuss the procedure that best suits your situation and map out the appropriate strategy, for instance:
- A transfer pricing ruling with the Dutch Tax & Customs Administration alone (unilateral APA).
- A tax ruling that has been approved by all tax authorities in question (bilateral or multilateral APA)
Please feel free to contact the specialists of International Tax Services to find out more about ATRs and APAs.