Transfer pricing for SMEs: three key points

TGS Innovised — De Voorwaarts

Updated: 30 September 2026

Transfer pricing may seem like a topic for multinationals. But a family business with a sales office in Germany, a manufacturing company with a Belgian sister company or a holding company that lends money to a foreign subsidiary is affected too. The Dutch Tax Administration (Belastingdienst) expects prices between related companies to be set at arm’s length and to be properly supported. In this article on transfer pricing for SMEs, we discuss three topics that increasingly come up in practice.

What is transfer pricing?

A transfer price is the price that related companies charge each other, for example for goods, services, management fees, royalties and interest. The starting point is the arm’s length principle (Article 8b of the Dutch Corporate Income Tax Act 1969, in Dutch): the price must match what independent parties would agree under comparable circumstances.

This applies regardless of the size of your business. Only the documentation requirements depend on size. The Dutch view on how to apply the principle is set out in the Transfer Pricing Decree 2022 (Verrekenprijsbesluit 2022, in Dutch).

1. Amount B: simplified transfer pricing for distributors

Many SME groups have a foreign sales company that buys products from the group and resells them to customers. How much profit should that distributor make? This is a frequent source of disputes with tax authorities.

The OECD has therefore developed Amount B: a simplified, fixed approach for “baseline” distribution activities. Using a table (the pricing matrix), you determine the profit margin on sales, depending on the industry and the ratio of assets and expenses to sales.

What does Amount B mean for the Netherlands?

• The Netherlands does not apply Amount B to Dutch distributors.
• The Netherlands does respect the outcome of Amount B in covered jurisdictions. These are the countries on an OECD list, mainly low- and middle-income countries. The conditions are that the country has implemented Amount B in its legislation, that the Netherlands has a tax treaty with that country and that Amount B has been applied correctly. The Dutch Tax Administration will then, in principle, not adjust the transaction.

Do you have a distributor in a country that applies Amount B? This can help avoid disputes in that country. Record in your documentation whether Amount B applies and why.

Read more: Amount B in practice: who is in scope and how does the pricing matrix work?

2. The transfer pricing file: which documentation is required?

Every business with transactions between related companies must be able to show in its records how the transfer prices were determined and why they are at arm’s length. Larger groups face additional requirements:

Is the documentation missing or inadequate? Then the burden of proof shifts to you: you must demonstrate that the prices are at arm’s length. Document at the time of the transaction, not when questions arise. Documentation prepared after the event carries less weight in practice.

Read more: The transfer pricing file: what should it contain, and how do you keep it up to date?

3. Intercompany loans: common mistakes

Loans within the group are very common among SMEs, for example from the holding company to the operating company or to a foreign subsidiary. Since the Transfer Pricing Decree 2022, the Dutch Tax Administration has been taking a more critical look. Common mistakes:

• No written agreement, or an agreement without a repayment schedule and security.
• A “standard” interest rate that is not supported by the borrower’s creditworthiness.
• Interest is not paid and no repayments are made. The loan may then be recharacterised as equity.
• A loan that no independent party would grant (a non-arm’s length loan, onzakelijke lening). A later write-down is then not tax-deductible.
• A guarantee or surety without a fee.
• Overlooking interest deduction limitations, such as the earnings stripping rule (in Dutch); since 2025: 24.5% of tax EBITDA, with a threshold of € 1 million.

Read more: Intercompany loans: from credit rating to non-arm’s length loan.

In this series

Our tip

Transfer pricing need not be complicated for SMEs. A well-designed policy with agreements, support for each type of transaction and an annual check prevents most disputes. Also make sure the policy ties in with the financial statements, because your auditor also looks at intercompany positions and the valuation of receivables.

Frequently asked questions about transfer pricing for SMEs

Advice on transfer pricing?

Contact our international tax specialists. We help you set up a transfer pricing policy that fits the size of your business.