The Netherlands has established Country-by-Country Reporting (CbCR) requirements as part of its commitment to the OECD’s BEPS (Base Erosion and Profit Shifting) Action 13 framework. These regulations are overseen by the Dutch Tax and Customs Administration (Belastingdienst) and aim to ensure tax transparency and prevent profit shifting by multinational enterprises (MNEs). This guide provides key insights into the Netherlands’ CbCR framework, including applicability, reporting procedures, penalties, and compliance resources for finance directors.

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Applicability of CbCR in the Netherlands

Criteria for Reporting:

• CbCR obligations apply to MNE groups if:
  • The group’s annual consolidated revenue equals or exceeds €750 million in the preceding fiscal year.
  • The ultimate parent entity (UPE) is tax-resident in the Netherlands, or:
    • The UPE is located in a jurisdiction that does not require CbCR,
    • There is no effective agreement for the automatic exchange of CbC reports between the jurisdiction of the UPE and the Netherlands,
    • The UPE fails to provide the necessary information.

Relevant Legislation:

• The CbCR requirements are outlined in Section 29b of the Corporate Income Tax Act (Wet op de Vennootschapsbelasting 1969), implemented following the EU Directive on Administrative Cooperation (DAC4) and aligned with OECD standards.

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Reporting Requirements

Information to be Reported: The CbC report must include aggregated, jurisdiction-specific data on:

• Revenue (segmented into related and unrelated party transactions),
• Profit or loss before income tax,
• Income tax paid and accrued,
• Stated capital and accumulated earnings,
• Number of employees,
• Tangible assets other than cash or equivalents.
• A description of each entity’s main business activities, along with its jurisdiction of tax residence.

Form and Submission:

• The report must be prepared in XML format using the OECD’s standard schema.
• Reports are submitted electronically to the Dutch Tax Administration (Belastingdienst) via the online portal, MijnBelastingdienst Zakelijk. Detailed technical specifications are provided on the Belastingdienst website: CbCR – Dutch Tax Administration.

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Filing Deadlines

• The CbC report must be filed within 12 months after the end of the reporting fiscal year. For instance, if the fiscal year ends on 31 December 2023, the report is due by 31 December 2024.
• Affected entities must also notify the Dutch Tax Administration of the designated reporting entity (UPE or surrogate parent entity) no later than the last day of the fiscal year.

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Penalties for Non-Compliance

Penalties:

• The Netherlands enforces significant penalties for non-compliance, including:
  • Fines of up to €20,500 for failing to submit a report on time or submitting an incomplete or incorrect report.
  • Additional sanctions may be imposed for deliberate non-compliance or repeated offences.

Defences:

• Entities may avoid penalties by demonstrating reasonable cause for non-compliance, though robust systems are expected to be in place to ensure timely and accurate filings.

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Confidentiality and Use of Information

Data Protection:

• Information in the CbC report is used solely for transfer pricing risk assessment and other compliance purposes. The Netherlands upholds strict data confidentiality in accordance with OECD guidelines.
• The Netherlands actively participates in the automatic exchange of CbC reports with other jurisdictions through the Multilateral Competent Authority Agreement (MCAA).