The State Secretary of Finance published new decrees that provide guidance on the various aspects of the regime that covers the Advance Pricing Agreement (APA) and replace the decrees of 2004. With these decrees the Dutch Government continues to provide (updated) guidance in gaining advance certainty regarding the tax treatment of potential investors in the Netherlands by as well residents as non- residents.
The most important changes can be summarised as follows:
Advance Pricing Agreements
- APAs will, in principle, be valid for a maximum period of 4 - 5 years. Exceptions on this main rule are possible, for example, long-term contracts.
- An APA could have retroactive effect provided that certain conditions are met.
- The definition of financial services companies has become broader; renting and leasing activities are within scope of the definition
- The Dutch tax authorities will spontaneously exchange information with other tax authorities if the related taxpayer’s group does not have any activities in the Netherlands, nor has plans to develop activities in the Netherlands.
- The definition of ‘small enterprise’ has been changed. Two of the following requirements have to be met to qualify:
- Net sales less than € 8.8 million
- Total assets less than € 4.4 million
- Less than 50 employees
In order to gain an advance pricing agreement, minimal substance requirements have to be met. The substance requirements are slightly textual adapted. However, with these adaptions no substantive changes to the substance requirements were intended.