Advance Pricing Agreement (APA)

An Advance Pricing Agreement with the Dutch Tax Authorities provides you in advance with clarity about the mutual transfer prices for your companies and prevents discussions later on with the Dutch Tax Authorities. An APA is not only reserved for large companies quoted on the stock exchange. It is also an interesting option for a family business or SME that operates internationally.

The law stipulates that associated companies should carry out transactions ‘at arm’s length’. You are also expected to have transfer pricing documents at your disposal. It you use incorrect transfer pricing, the tax authorities might make heavy corrections over past years. By concluding an APA, you can obtain certainties regarding all transfer prices issues of your company.

The request to conclude an APA is done by sending a request to a competent tax inspector. At the same time, a copy is sent to the APA/ATR of the Dutch Tax Authorities in Rotterdam. The application specifies all the relevant facts about your company. For the purpose of applying for an APA, a joint case management plan team is set up with the Dutch Tax Authorities. This plan also states the duration of the application. An APA is usually concluded for a period of 4 to 5 years.

An APA application usually entails an extensive benchmark study that focuses on the comparable figures of independent market parties. To reduce the administrative workload and costs, upon request the Dutch Tax Authorities might carry out a benchmark for SMEs under certain conditions. We will consult with you about which path is most appropriate for your company.

An APA provides you with assurance in advance and prevents disputes with the Dutch Tax Authorities afterwards

accon■avm can supervise your entire path – from application to an advance pricing agreement. Together with you, we will examine the transfer pricing documents and the transfer pricing method. Contact one of the specialists in international tax advice via international@acconavm.nl .