TP guarantee fees under the microscope – part one

On May 28 2025, the Coordination Group on Transfer Pricing (Coördinatiegroep Verrekenprijzen, or CGVP) of the Dutch tax authorities released a focused memorandum on the transfer pricing treatment of intra-group financial guarantees. The note expands on Chapter 9 (financial transactions) of the Dutch Transfer Pricing Decree of June 14 2022 and operationalises the principles of Chapter X of the 2022 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the OECD TPG) – particularly paragraphs 10.154 to 10.193 on financial guarantees.

The publication is not a paradigm shift. It is, in substance, a reconfirmation of existing Dutch practice, but with a level of operational granularity that practitioners had been waiting for. The CGVP introduces sharper tests on:

• Characterisation of an umbrella credit arrangement following the Paraplu-kredietarrest (umbrella credit) ruling of the Hoge Raad (the Supreme Court of the Netherlands) on March 8 2013;

• Partial recharacterisation of guaranteed third-party debt as a deemed loan to the guarantor followed by a capital contribution to the borrower; and

• The yield approach, with explicit caveats around the BBB-/BB credit score threshold and the role of implicit support.

Crucially for Dutch holding structures, the CGVP also touches – for the first time in published guidance – on the interaction between guarantee fees and the Article 403 declaration of Book 2 of the Dutch Civil Code, as well as cash-pool guarantees and performance guarantees outside the lending context.

This matters for multinational enterprises operating into/out of the Netherlands for the following reasons:

• Intra-group guarantee structures involving Dutch entities will face heightened scrutiny in tax audits, particularly as part of the CGVP’s December 2025 risk analysis toolkit;

• The Court of Appeal of Amsterdam decision of September 11 2025 in Tobacco BV provides judicial reinforcement of the implicit-support doctrine, denying full deductibility of guarantee fees where group affiliation already enhanced creditworthiness;

• Indian, UAE, and broader Gulf Cooperation Council outbound investors with Dutch holding or financing entities should reassess existing guarantee fee positions, the underlying credit analyses, and advance pricing agreement (APA)/advance certainty options; and

• Treasury teams must revisit the documentation of cash pools, parent comfort letters, and 403 declarations to ensure they are not inadvertently repriced as financial guarantees.

The hierarchy of Dutch sources is as follows.

Layer	Source	Status
Statute	Article 8b, Dutch Corporate Income Tax Act 1969 (Wet Vpb 1969) – codification of the arm’s-length principle	Binding law
Anti-mismatch rules	Articles 8ba–8bd, Wet Vpb 1969 – denial of unilateral downward adjustments where no foreign pick-up	Binding law (from FY 2022)
Decree	Dutch Transfer Pricing Decree of June 14 2022 – Chapter 9 specifically on financial transactions, including guarantees	Binding on tax authorities
Internal note	CGVP Memorandum on Guarantee Fees, May 2025 and CGVP Memorandum on Cost-Plus Method, May 2025	Internal guidance for inspectors; persuasive but not binding on taxpayers
OECD	Chapter X of the 2022 OECD TPG – especially paragraphs 10.154–10.193 on financial guarantees	Interpretative source
Case law	Paraplu-kredietarrest and Tobacco BV	Persuasive precedent

The CGVP is a specialist unit housed in the Tax & Customs Administration office in Rotterdam. Local Dutch inspectors are obliged to seek binding internal advice from the CGVP on transfer pricing matters that:

• Have precedential value;

• Are part of mutual agreement procedure/APA processes; or

• Involve transactions with low-tax jurisdictions, intangibles, or cross-border financial transactions.

While the May 2025 memorandum is technically internal, it operationally sets the audit position the Dutch revenue will defend at first instance.

The second and third articles in the series explore the requirements for guarantee fees and the implications of the Tobacco BV ruling.

This article reflects the views of the author and the SBC International Tax Practice based on materials available in the public domain as of the date of publication. It is intended as professional commentary and does not constitute legal or tax advice. The application of transfer pricing principles to any specific arrangement requires a fact-specific analysis. SBC accepts no liability for action taken in reliance on this article without independent professional advice.