The Newly Updated Dutch Transfer Pricing Guidance, Part 3: Intangibles

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 Dutch Official Gazette.
While the most material change or update in the new TP Decree is the inclusion of extensive guidance on transfer pricing for financial transactions, it also reiterates in detail what the applicable rules are for intangibles.
Payments for the use or transfer of intangibles between associated enterprises have been a popular audit item in the Netherlands, in particular in light of the OECD Transfer Pricing Guidelines' (OECD TPG) elaboration on the so-called “DEMPE” functions — the Development, Maintenance, Protection and Enhancement functions related to intangibles. Paragraph B.2 of Chapter VI of the OECD TPG on intangibles lists the DEMPE functions and underscores the importance of appropriate compensation to be allotted to these functions when performed by members within a multinational enterprise (MNE) group. The new TP Decree explicitly incorporates the OECD TPG in this respect.
In this third part of our five-part series, the authors discuss the new TP Decree and position of the Dutch Tax Authorities (DTA) on intangibles.