The Newly Updated Dutch Transfer Pricing Guidance, Part 1: Basics and Treatment of Subsidies and Stimulus Measures.

On July 1, 2022, a new Dutch Transfer Pricing Decree No. 2022-0000139020 dated June 14, 2022 (hereinafter ‘‘new TP Decree’’), was published in the Gazette. Effective the day after the date of publication, the new TP Decree updates the previous one, from April 2018. In addition to explaining how the arm’s-length principle will be applied and how accurate delineation is conducted, it addresses several current transfer pricing topics that can broadly be categorized under the five following headings:
1. Treatment of subsidies and stimulus measures;
2. Treatment of intercompany financial transactions;
3. Treatment of intangibles;
4. Treatment of intra-group services; and
5. Treatment of financial service entities.

The discussion of this new TP Decree and analysis of changes presented is divided in five separate parts, following the above broad categories. In this first part, the transfer pricing treatment of subsidies and stimulus measures together with the force and effect of the new TP Decree is discussed, as well as how the arm’s-length principle will be applied according to the new guidance.