The DTA had proposed an adjustment for fiscal years 2018-2020 based on the TNMM with 15% mark-up on a restricted cost base, effectively allocating 97% of profits to the Netherlands. The dispute involved transfer pricing adjustments of approximately €3.3 million.
Similar to the judgments of the Amsterdam Court of Appeal in the BAT case6 and ADM case7, this judgement (of the District Court of Noord-Holland) focuses on the division of the burden of proof between the DTA and the taxpayer, resulting from the concurrence of Article 8b of the Dutch CITA 1969) and Article 27e GTA. The court in this case examined the delineation and characterization of the integrated transaction between the employees of the PE and the head-office and validated the PSM as the appropriate transfer pricing method.
