The Transfer Pricing (TP) coordination group of the Dutch Tax Authorities (DTA) recently published an internal note, Opzet en aandachtspunten TP‑analyse, explaining how inspectors are expected to prepare and structure transfer pricing risk assessments. Although non‑binding, the note gives taxpayers meaningful visibility into how cases will be reviewed and how the DTA performs early assessments to decide whether a full audit should be undertaken. Inspectors are instructed to start by forming a comprehensive understanding of the business - including group structure, key intercompany transactions, and multi‑year financial performance - before setting the scope and depth of further scrutiny.

The approach combines TP documentation with publicly available information and encourages direct discussions with taxpayers to clarify how the business operates in practice, including functions, assets, risks, and economic circumstances not fully captured in formal files. The note also lists broad categories of potential follow‑up requests, ranging from transaction‑level detail, and contracts to issue‑specific deep dives on intangibles, financial transactions, permanent establishments and business restructurings. External commentary confirms that these materials are internal guidance rather than binding policy, but positions that diverge materially can expect to be challenged in practice.

Key Areas of Focus Highlighted by the DTA

• Intercompany Transactions and Pricing Methods – Clarity on the nature of flows, applied methods, and implementation evidence.
• Intangibles and DEMPE – Identification of who performs, controls, and funds development, enhancement, maintenance, protection, and exploitation activities.
• Financial Transactions – Intra‑group loans, explicit guarantees, and cash pools, including assessment of stand‑alone borrowing capacity, implicit versus explicit support, and pricing support (credit rating, derived‑rating analysis and incremental benefit).
• Captive Insurance – Scope of insured risks, contracts, and alignment with functional capabilities.
• Permanent Establishments – Allocation of assets, capital, and profit attribution mechanisms across jurisdictions.
• Business Restructurings – Commercial rationale, shifts in functions/risks, and corresponding remuneration before and after the change.

Key Takeaways

• Expect broader, contextual, and multi‑year reviews that go beyond the Local File, with inspectors triangulating TP documentation, financials and public disclosures.
• Anticipate direct engagement early in the process to test the factual accuracy of the TP narrative and to understand operational realities.
• Prepare for granular follow‑ups on functional analyses, transaction characterisation, and the alignment of profit outcomes with functions, assets, and risks.

Impact for Taxpayers

Audits are likely to be more interactive and iterative. Inconsistencies between your TP documentation, statutory accounts, and public sources will be identified earlier, and multi‑year results will be used to assess whether profitability aligns with your functional footprint and risk control. Expect early follow‑up questions, requests for clarification, and targeted deep dives where risk signals arise.

How To Prepare

• Align the Narrative Across Sources: Reconcile the Master File, Local File, statutory accounts, tax return, and public disclosures, so that functions, value drivers, and risk control align with observed profitability over multiple years. Resolve gaps or contradictions as early as possible.
• Refresh the Functional Analysis: Update roles, decision rights, and control over risks following any reorganisations. Maintain records of when functional interviews took place and with whom, to underpin their relevance to local activities – i.e., lack of local fact verification may be seen as an attention point.  
• Prepare Targeted Documentation for Risk Areas: Create concise files for high‑risk topics - including services and cost allocations, intangibles and DEMPE, financial transactions, guarantees, permanent establishments, and restructurings - capturing the commercial rationale and organisational decision‑making behind the chosen TP method. As audits often occur years later, contemporaneous records of key decisions are essential.
• Evidence Implementation, Not Just Policy: Be ready to show how the TP method is embedded in systems and monitoring, and how exceptions are handled. This is a frequent line of questioning in early meetings.
• Define a Clear Audit Representation Strategy: Groups should identify who is authorised to represent the local affiliate during a DTA audit, to manage information flow and ensure consistency between the TP documentation and the facts established during the iterative fact‑finding process. This also underscores the importance of robust local fact‑finding and evidence gathering when preparing TP documentation.

This note sits within a wider series from the TP working group, including guidance on the application of the cost‑plus method and the treatment of guarantee fees, underscoring the DTA’s growing focus on practical, detailed TP scrutiny.