If your business is part of a multinational group and engages in cross-border transactions with other entities within the group, your business is obliged to demonstrate that the transactions were entered into on commercial grounds and that the remunerations for these transactions are at arm’s length.

The arm’s length principle

The core of the arm’s length principle is that associated enterprises are assumed to engage in business on the same terms and conditions that third parties in similar circumstances would have done. The arm’s length principle is adhered to by most countries and is included in all bilateral tax treaties concluded by the Netherlands.

A business can demonstrate adherence to the arm’s length principle with regard to intercompany cross-border transactions by preparing (mandatory) annual transfer pricing documentation. Furthermore, the arm’s length principle also applies to business changes, such as restructurings or post-merger integrations, the implementation of a new operational or transfer pricing model, which should be documented separately.

We can advise you about:

Grant Thornton has a team of experienced specialists that are fully dedicated to Transfer pricing. Our Transfer pricing team can assist you with:

  • The design and implementation of transfer pricing policies as a result of a business change, such as a post-merger integration, restructuring or development of a new business model;
  • Drafting mandatory annual transfer pricing documentation;
  • Assessing your current transfer pricing documentation and policy;
  • Profit allocation for permanent establishments;
  • Assisting in the process of transfer pricing audits by the tax authorities;
  • Obtaining tax rulings such as advance pricing agreements (APA).

Global consulting for your multinational corporation

Grant Thornton has an extensive worldwide network. The Grant Thornton Transfer Pricing Team works closely with international colleagues from other member firms, and can assist in transfer pricing matters beyond the Dutch borders. For further insight regarding world-wide transfer pricing regulations, we would like to refer you to the Grant Thornton Transfer Pricing Guide.


If you would like to know more about our transfer pricing services, or would like to talk about your business’ transfer pricing policy without any strings attached, please feel free to contact Charles Marais, Partner Transfer pricing.