Dutch Zinc case highlights key transfer pricing challenges

13 juli 2020
13 July 2020

The recent Court of Appeal decision in the Dutch Zinc case encapsulates some complex issues including burden of proof, application of the arm's length principle and the impact of transfer pricing on business restructuring. Rezan Ökten, Sebastian Frankenberg and Gijs van Koeveringe explore the finer detail of the dispute, and provide some key takeaways for practitioners.


The Zinc case involved a Dutch taxpayer (the "Taxpayer") that is part of a multinational group (the "Group") which processes zinc and related raw materials. Before 2003, the Taxpayer was responsible for the most important functions of the zinc business, owned the relevant assets (ie raw materials), and controlled economically significant risks relating to the zinc smelting activities. In addition, the Taxpayer independently concluded purchase agreements, supply agreements and hedging arrangements. From a transfer pricing perspective, the Taxpayer was therefore considered an entrepreneur in transactions relating to the Group's zinc business and was remunerated accordingly.

Read the article in International Tax Report.
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