Dutch Tax Rulings: 2024 Insights and Developments on APAs
The Dutch State Secretary for Finance provided the Parliament with the 2024 annual report on the ruling practice on May 22, 2025. The 2024 report sheds light on the changes and developments in international tax rulings requested in the Netherlands during 2024. This blog high level sets out the 2024 general aspects of Dutch tax rulings. The blog further analyzes the trends in ruling requests and focusses on unilateral, bi- and multilateral Advance Pricing Agreements (APAs).
Stable number of Dutch Ruling Requests
The total number of Dutch ruling requests remains stable. The total number of requests received only slightly decreased to 583 in 2024, compared to 586 in 2023. The number of requests processed slightly increased to 608 in 2024, compared to 596 in 2023. Because the number of processed requests in 2024 is greater than the number of received requests, the stock has decreased slightly to 707 (2023: 731).
These numbers show a remaining reliance on the Dutch tax ruling system by international businesses seeking tax certainty. The composition of rulings is as follows over these 5 categories during 2024:
- Advance Tax Rulings (ATRs):
- Advance Pricing Agreements (APAs)
- Bilateral and Multilateral APAs
- Innovation Box Rulings
- Other rulings.
In the summaries of APAs published by the Dutch Tax Authorities (DTA), we can see that one APA has been granted with respect to financial transactions during 2024. The Dutch taxpayer had an active treasury department (more than 10 staff) in the Netherlands and another treasury team at HQ level. The Dutch taxpayer raised loans from the market. Its credit rating and financial capacity were such that it could raise this financing on a stand-alone basis. Both locations exercised control over key financial risks. On the basis of a contribution analyses, the APA was granted using the profit split to price the intercompany transactions.
In the APA summaries, there is also reference to toll manufacturing APAs. For toll manufacturing, is the net cost-plus may be applied. When benchmarking such activity, comparables should not have cost of goods sold, to aim for similar functions and risks. In practice comparables have cost of goods sold. Hence, reliable benchmark adjustments need to be made. To determine the reward for toll manufacturers, the costs of raw and auxiliary materials are to be eliminated from the comparable companies. There is reference to one such APA request for toll manufacturing remuneration. However, this request was revoked because the taxpayer could not make sufficiently reliable benchmark adjustments.
Shift from Unilateral to Bi- and Multilateral APAs
One of the trends that continued in 2024 is the shift from unilateral to bi- and multilateral APAs. This can be attributed to two key factors:
- Since the overhaul of the Dutch ruling practice as from July 2019 and the much stricter requirements and robust process for unilateral APA’s, the number of unilateral APAs has been decreasing. The APA processing time also increased from 2-3 months in 2019 to on average 12 months.
- MNEs are seeking to obtain more comprehensive agreements that provide certainty across multiple jurisdictions. The aim is to consequently avoid double tax under bi- and/or multilateral agreements. The processing time is around 3 years (32 months in 2023, compared to 40 months in 2023) for bilateral APAs.
Duration of Ruling Processes quicker for APAs
The duration of the ruling process is a critical factor for businesses. The 2024 data shows that the processing time for ATR requests increased slightly. For Innovation box requests it remained the same. The processing time for unilateral, bilateral and multilateral APAs and other tax rulings decreased.
Conclusion
The 2024 annual report on Dutch tax rulings reveals stabilization in the ruling practice. All APA requests take less time to complete. These are possible with respect to financial transactions. There remains a shift towards bilateral and multilateral APAs. Also, there is a large chance of success after filing such requests, as per this 2024 data. This all demonstrates the Netherlands' commitment to providing tax certainty and adapting to the evolving tax landscape.
