Expertise & case studies
Tax
Layers of new legislation at domestic, European and OECD level, ambiguous and often conflicting tax rules and treaty provisions, and diverging interpretations in multiple jurisdictions have made the tax landscape increasingly complex to navigate. This makes it more and more difficult to trade-off risk and reward of investment options and tax structuring alternatives.
Huygens helps navigate this complexity in international and Dutch corporate taxation, dividend and other withholding taxes, as well as tax treaty application. Whether in the investment structuring phase or in negotiations or disputes with tax authorities, we help clients make sensible decisions in these areas, by providing advice in the form of financial cost-benefit analysis, considering the risk profile and the after-tax return of each option.
Examples of our experience
- General tax advisory on, e.g., the application of the Dutch participation exemption and anti-hybrid mismatch rules.
- Comparisons of investment structures, taking into account the benefits and tax risks involved.
- Modelling the potential impact of ATAD3 and other proposed legislation.
- Advising on settle/litigate decisions based on the expected financial impact of these choices.
- Testing the impact of negotiation proposals using financial models.
- Quantifying the tax (+ penalty/interest) risk in tax insurance transactions.
Transfer pricing
Transfer prices between related parties should reflect the commercial and financial relations between associated enterprises, including the risks assumed by each party. Traditional benchmark studies not often provide convincing data on risk allocation, which increases the chance of tax authorities successfully challenging the transfer prices agreed.
Huygens helps clients comply with the at arm’s length principle, whether in the implementation phase or in negotiations or disputes with tax authorities, by quantifying the allocation of risk and return. All conforming to the principles underlying the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.
Examples of our experience
- Pricing and determining debt volume of intercompany loans and other financial instruments (e.g., cash pooling), captive insurance transactions, and other goods or services transactions within a supply chain.
- Determining exit values upon business restructurings (e.g., conversions) or transfers of functions and risks, by inter alia considering options realistically available.
- Pursuing (bilateral) advance pricing agreements (APA) and assisting clients in mutual agreement procedures (MAP).
- Providing second opinions in discussions or negotiations with tax authorities and in MAPs
- Providing transfer pricing input in a number of high-profile litigation cases.
An economic approach to transfer pricing for intra-group financing
Valuations
Valuations are inextricably connected to tax and transfer pricing, but valuation and tax practitioners often operate independently without exactly knowing the key drivers and aspects from each expertise’s perspective.
Huygens offers valuation services in line with the standards of the Dutch Institute for Registered Valuators (NiRV) in combination with its tax experience. Our multi-disciplinary perspective allows us to seamlessly translate tax into valuations and finance, and vice versa.
Examples of our experience
- Valuation of shares for intercompany transactions, protective tax assessments or business successions.
- Valuation of instruments (e.g., ratchets) to be issued in the context of a management incentive plan or employee stock option plan.
- Transfer of assets/business enterprise, e.g., in an intellectual property on-shoring, estate planning or litigation context.
- Tax-related purchase price allocations and fairness opinions in the context of M&A.
- Valuation of uncertain tax positions for accounting (IAS12 or FIN48) or M&A purposes, or in case of insolvency.
