Draft Decree on new ruling practice (the Netherlands)

On April 23, 2019, the Dutch State Secretary of Finance proposed a new Decree governing the granting of international rulings by the Netherlands. This new Decree is supposed to enter into force on July 1, 2019 and relates to rulings with a cross-border impact; e.g. application of participation exemption to foreign income, the presence of a permanent establishment in the Netherlands, head office/permanent establishment (allocation) rulings, catch-all clauses contained in limitation on benefits provisions in tax treaties, bilateral and multilateral APAs et al.

07 May. '19 4 min. Nedelina Vasilkova


According to the draft Decree the International Fiscal Certainty Team (the IFZ Team) will act as the first point of consultation for obtaining the majority of international tax rulings. This team will monitor and ensure unity in quality of/and adherence to the ruling practice and ruling policy. With respect to bilateral and multilateral APAs, the draft Decree clarifies that a request for such a (bilateral or multilateral) APA must be circulated to the directorate of international affairs and consumption taxes of the Ministry of Finance (directie Internationale zaken en verbruiksbelastingen, IZV). The IZV team is responsible for concluding bilateral and multilateral APAs and will be assisted by the IFZ Team.

As currently the case is, all international rulings are in principle applicable for a period not exceeding 5 financial years. However, in exceptional cases, for example when long-term contracts are involved, the draft Decree provides the possibility for international tax rulings to be granted for a period of 10 financial years, with an evaluation taking place after expiration of the first 5 years. In respect of information disclosure we note that the draft Decree clarifies that any taxpayer requesting a ruling should provide, among other elements, a detailed description of the relevant facts and circumstances of the acts/transactions under consideration, a conclusion on the fiscal consequences, the other states involved, the group’s worldwide structure et al.

Economic nexus requirements and situations in which no ruling will be granted

The draft Decree emphasizes that international tax rulings are only feasible if the requesting company is part of a group carrying on operational business activities (bedrijfseconomische operationele activiteiten) in the Netherlands. It is also required that the requesting company also carries on such business activities for its account and risk (for which sufficient relevant staff is available in the Netherlands). No ruling will be considered in situations when the only or main purpose of the transactions and/or structures aims at Dutch or foreign tax savings or the transactions in question are performed with an entity included in the list of low-tax jurisdictions.

Disclose international tax rulings

In order to increase transparency and to align with the OECD Action Plans in the context of base erosion and profit shifting, under the draft Decree, anonymised summaries of all granted international rulings (as of July 1, 2019) will be published. The publications will contain a brief summary of the facts and circumstances as well as the most important conclusions established from transfer pricing documentation and an analysis of the legal analyses upon which the rulings have been granted. It should be noted that the same applies for not granted rulings. In this respect the reasoning why rulings have not been granted will also be disclosed to the public.


  • The economic nexus requirements in connection to the information disclosure will (reasonably speaking) limit the amount of ruling requests as well as the amount of rulings that will be granted.
  • For taxpayers the disclosed international tax rulings will be useful in determining whether there is actually any need for requesting an international tax ruling. Observing however the first set of draft (example) publications of international tax rulings we question whether the disclosed information is sufficient. The information disclosed seems to be (too) general.
  • The disclosed bilateral and multilateral APAs may be very helpful in determining international transfer pricing policies. At least these rulings could function as a sanity check of the applied TP methodology.
  • Conceptually a ruling may provide certainty in the Netherlands. It should however be noted that following the disclosure of tax rulings to other Tax Authorities (following the release of the OECD Action Plans in the context of base erosion and profit shifting), rulings granted by the Netherlands may trigger cross-border uncertainty.
  • It should be noted that a large amount of international tax rulings relate to the application of the Netherlands preferential IP regime (innovatiebox). These rulings typically (9/10 cases) are based on a profit split methodology and will also be disclosed in summarized / anonymised form. The existing OECD discussion on the application of the profit split method may influence these rulings.


The information contained in this blog is of general nature and does not address the specific circumstances of any particular individual or entity. Hence, the information in this blog is intended for general informational purposes and cannot be regarded as advice. Although we endeavour to provide accurate and timely information and great care has been taken when compiling this blog, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. We do not accept any responsibility whatsoever for any consequences arising from the information in this publication being used without our consent.

Nedelina Vasilkova

Nedelina Vasilkova is an associate and applicant member of the Dutch Association of Tax Advisers (NOB)

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