Doing Business in the Netherlands 2012 - American Chamber of ...

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are incorporated in domestic law by reference to them in the listed decrees. APAs are encouraged and the Dutch tax authorities aim to be the premier service providers in that they strive to provide for rapid advance certainty in a mutually agreed-on period of time. To illustrate, the total number of APA requests received in 2009 and 2010 were 653 and 770 requests, respectively. The average time (from filing the request) to finalize a unilateral APA is approximately 8-12 weeks, whereas the average time for a bilateral APA is about 18-20 weeks (from filing the request and setting up the APA team). 18.17 Competent Authority/Arbitration Convention Although the Dutch transfer pricing regime can be characterized as pragmatic, a transfer pricing adjustment or another cross-border conflict may result in double taxation. In such cases, the competent authorities can resolve the double taxation resulting from the dispute by way of competent authority proceedings under a bilateral tax treaty or under the Convention on the Elimination of Double Taxation in Connection with the Adjustment of Profits of Associated Enterprises (“the Arbitration Convention”), provided that both States involved are signatories to this Arbitration Convention. The Dutch government actively promotes the effectiveness of both procedures. One of the more recent initiatives of the Dutch government includes the introduction of the Netherlands Accelerated Mutual Agreement Procedure, referenced above. The main goals of this initiative are to improve transparency, reduce taxpayer costs and find a resolution within a target (short) time frame. A person resident in the Netherlands for tax treaty purposes that is being subject to economical or juridical double taxation is allowed to invoke competent authority proceedings under an applicable bilateral tax treaty. All bilateral tax treaties for the avoidance of double taxation concluded by the Netherlands contain a provision similar to Article 25 of the OECD Model Convention. As of 1992, the 200 Baker & McKenzie
Doing Business in the Netherlands 2012 Netherlands, as a general policy, has been in favor of including an arbitration clause in the competent authority article when concluding a bilateral tax treaty. This was long before the 30 January 2007 Report adopted by the Committee on Fiscal Affairs regarding the inclusion of a new paragraph 5 to Article 25 of the OECD Model Convention with an option to send a case to arbitration upon the request of the taxpayer. Further, the Netherlands favors including the arbitration option in treaties that are renewed. The Netherlands has an arbitration clause included in treaties with various countries. Separate and apart from the applicable treaties for the avoidance of double taxation, double taxation arising from transfer pricing adjustments within the EU may be resolved under the Arbitration Convention. This Convention explicitly caters to handling transfer pricing issues. The Arbitration Convention has a significant advantage over regular treaties for the avoidance of double taxation in that it applies to situations including permanent establishments of EU companies in other EU states as well. The Arbitration Convention guarantees the removal of double taxation within a certain period. Under the Arbitration Convention, if the Member States concerned are unable to agree with one another through mutual consultation after two years, a second (arbitration) phase ensures that a solution is arrived at through the arbitration committee within six months. After the arbitration committee has given its advice, the competent authorities of the Member States are obliged to resolve the double taxation within six months. 18.18 European Economic Interest Grouping and Societas Europaea 18.18.1 EEIG Since July 1989, it has been possible to form a European Economic Interest Grouping or “EEIG” (Europees Economisch Samenwerkingsverband or “EESV”) in the Netherlands. An EEIG must be registered with the Trade Register of the Chamber of Baker & McKenzie 201
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Editorial Contributions Robert van
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Innovative ways to inform you Doing
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1 The Netherlands Doing Business in
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Steady-Course Policy Doing Business
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2 Legal Forms of Doing Business Doi
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2.3 Branch versus Subsidiary Doing
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4 The Subsidiary 4.1 Incorporation
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8 Commercial Contracts 8.1 General
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9 Real Estate 9.1 Ownership Doing B
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9.7 Leases Doing Business in the Ne
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10.5 The European Economic Area Doi
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12 Telecommunications 12.1 Market S
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12.9 Net Neutrality Doing Business
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14 Labor Law 14.1 Term Doing Busine
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24.13 Arbitration Doing Business in
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Tax Corporate & International Tax H
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