Clarification On The Interaction Between Dutch Transfer Pricing Mismatch Rules And Foreign Participation Exemption Regimes

The Dutch tax authorities (DTA) published a new Knowledge Group (KG) position clarifying that the Dutch transfer pricing mismatch rules do not apply when a foreign regime that effectively functions as an objective exemption applies to the transfer of a participation. This beneficial KG position supplements the earlier KG position of 17 March 2025 regarding the interaction between the Dutch participation exemption and the transfer pricing mismatch rules. KG positions form part of DTA policy, meaning they are binding on tax inspectors. Taxpayers can rely on them from the date of publication, i.e. 20 August 2025 for this KG position.

Background

As of 1 January 2022, the Netherlands has anti-abuse legislation against double non-taxation resulting from transfer pricing mismatches. Pursuant to Article 8bd Dutch Corporate Income Tax Act (CITA), the Dutch corporate income tax (CIT) base for the acquirer of assets or liabilities transferred through