International Tax

Transfer Pricing: Rules and Practice in Selected Countries (M-P) (Portfolio 6965)

  • This Porfolio presents the rules and practice related to transfer pricing in Mexico, the Netherlands, and New Zealand.


Chapter 110, “Transfer Pricing Rules and Practice in Mexico,” analyzes the transfer pricing rules in Mexico. The chapter explains the origin of the current transfer pricing regime, the background for the arm’s length standard, the unique features of the documentation requirements, as well as the technical aspects of transfer pricing methods and comparability standards. It covers the audit process, the rules for APAs, and Competent Authority. One section is devoted to transfer pricing for maquiladoras, reflecting the importance of this industry. The chapter was written with non-Mexican practitioners in mind, with an emphasis on the interaction of the U.S. and Mexican rules.

Chapter 115, “Transfer Pricing Rules and Practice in the Netherlands,” first describes the Dutch legal transfer pricing framework, i.e., the statutory transfer pricing provisions included in Dutch tax law since 2002. These provisions aim to: (1) authorize the adjustment of consideration paid in related party transactions; and (2) force taxpayers to maintain transfer pricing documentation. However, these provisions do not prescribe the use of a specific transfer pricing method or deal with how transfer pricing adjustments are accounted for. Therefore, OECD guidelines, jurisprudence, and certain decrees issued by the Dutch Ministry of Finance are discussed. The author further focuses on how taxpayers can defend themselves against transfer pricing adjustments imposed by the Dutch tax authorities. He also highlights the tax treatment of secondary transfer pricing adjustments, and the tax treatment of penalties and fines related to adjustments. The burden of proof in the case of transfer pricing adjustments generally rests with the Dutch tax authorities. The chapter concludes with a description of other dealings with the Dutch tax authorities with respect to transfer pricing, such as requesting an Advance Pricing Agreement, entering into a Mutual Agreement Procedure, as laid down in all Dutch income tax treaties, or starting an arbitration procedure under the EU Arbitration Convention. In an appendix, the author provides a non-exhaustive list of documentation which a company should have available for submission to the tax authorities.

Chapter 120, “Transfer Pricing Rules and Practice in New Zealand,” provides a description of the New Zealand transfer pricing environment, including details of the legislative rules and how these rules are applied and administered by New Zealand’s revenue authority, the Inland Revenue Department (IRD). The chapter begins with an overview of the New Zealand tax system and its administration, followed by discussions of the types of transactions that are subject to New Zealand’s legislative transfer pricing provisions, the interaction of the transfer pricing rules with other New Zealand tax regimes, and a summary of New Zealand transfer pricing case law. A detailed discussion of the IRD’s Transfer Pricing Guidelines is provided, as well as the New Zealand transfer pricing reporting and documentation requirements and the application of penalties and interest to transfer pricing adjustments. The chapter includes an overview of the IRD’s enforcement programme and its approach to transfer pricing reviews and audits, as well as Advance Pricing Agreements and Competent Authority proceedings, and concludes with a discussion of the interaction of New Zealand’s transfer pricing, customs valuation, and anti-dumping rules.

Table of Contents


Enacted Legislation

Amendment to 2012 Tax Law

Legislation Implementing Rules on PE Status of Maquila Operations


Court Ruling on Resale Price Method


Enacted Legislation

The Netherlands Replaces Thin Capitalization Rules with Interest Deduction Limitations

Administrative Developments

Secretary of Finance Issues Guidance on Attribution of Profits to Permanent Establishments, IFZ 2010/457M


Ruling on Sale of Intellectual Property Rights to Third Party, Nr. 11/00045

Ruling on Tax Treatment of Non-Arm’s-Length Related-Party Loan, Nr. 11/00027 and Nr. 11/00049

Ruling on Tax Treatment of Non-Arm’s-Length Related-Party Loan, Nr. 11/00357

Supreme Court Ruling on Tax Treatment Non-Arm’s-Length Related-Party Loans


Pending Legislation

Change to Thin Capitalization Rules Included in 2013-14 Budget

Detailed Analysis

Arthur Kristoffersen
Arthur Kristoffersen
Head of the Competent Authority Department
Norwegian Tax Administration
Harmen van Dam
Tax Adviser
Loyens & Loeff
Dr. Julie Harrison
Dr. Julie Harrison
Associate Professor, Department of Accounting and Finance
University of Auckland Business School
Ulises Ruiz
Senior Manager, Latam Business Center
Ernst & Young LLP
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