External database for financial information

Dutch Tax and Customs Administration

Use of an external database for the Tax Administration's monitoring of financial transactions within multinational companies.

Last change on 11th of June 2025, at 15:12 (CET) | Publication Standard 1.0

• Publication category: Other algorithms
• Impact assessment: Field not filled in.
• Status: In use

General information

Theme

Public finance

Begin date

2023-03

Contact information

[e-mail]

Link to publication website

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/

Link to source registration

https://over-ons.belastingdienst.nl/onderwerpen/omgaan-met-gegevens/algoritmeregister/externe-databank-voor-financiele-informatie/

Responsible use

Goal and impact

The external database is in use for the Tax Administration's monitoring of multinational companies. This external database is used to validate or refute prices agreed between two companies of one multinational group.

• The Transfer Pricing Coordination Group (hereafter: CGVP) is the part of the Tax Administration that is responsible for - in summary - coordination, advice and (internal) assistance in the field of transfer pricing (see CGVP Institutional Decision). These are always non-natural persons.
• Transfer pricing comes into play if entities, which are part of the same (multinational) group, enter into transactions among themselves. Taxpayers must substantiate that the conditions (of which the price forms part) on which the mutual transaction was entered into correspond to the conditions as third parties would have agreed. This is usually substantiated through public databases containing historical transactions. See also Section 8b Corporate Income Tax Act 1969 and the Transfer Pricing Decree.
• With regard to the supervision of transfer prices by the Tax Authorities, the CGRP must also have access to these databases in order to test whether the transfer prices of taxpayers are acceptable
• The database uses search criteria to determine a subset of third-party transactions (peer group). The search criteria are determined by the user based on the relevant facts and circumstances of the transaction within the multinational group.
• Based on the output of this subset, the transfer price is determined/tested. If the price used by the group deviates too much from the peer group, the Tax Administration employee can make the decision whether the price should be questioned.
• Besides displaying historical transactions between third parties, the Bloomberg database also includes the ability to calculate prices for some specific transactions. These are so-called swap rates for changing from a fixed to a floating interest rate or changing the currency.

Considerations

The external database is used to access public data. Access to this data enables the Tax and Customs Administration to make better choices for the deployment of scarce supervisory capacity. Furthermore, access to the database enables the Tax and Customs Administration to be a professional interlocutor of the taxpayer/tax consultant, as well as foreign tax authorities that often also have access to the external database.

The databases are used on a case-by-case basis only. Furthermore, the Tax Administration has no influence in any way on how the databases work in the background. The user's influence is limited to the choice and definition of search criteria, and input for the query of the so-called swap rates. The results of the databases are reviewed and weighted by the employee. If it follows from this that an adjustment of the transfer rate is necessary, the four-eye principle is always applied here too.

Human intervention

Human intervention in the Tax Administration context implies that a competent and knowledgeable employee plays a substantial role in decision-making.

Human intervention is always involved in the operation of the algorithm. The database only provides an opinion. It is the Tax Administration employee who makes the decision.

Risk management

• Privacy and AVG

The use of data is tested against the General Data Protection Regulation (AVG). Reviewing personal data reveals any privacy risks and allows appropriate measures to be taken.

The AVG prescribes that no more data should be used than necessary. This is called data minimisation. The Tax and Customs Administration regularly examines whether the data used are still necessary and can therefore be used. The database is used exclusively for monitoring non-natural persons.

• Use of special personal data

No personal data are used in the use of the database and therefore no special personal data are used for this purpose.

• Equality and non-discrimination

The Tax Administration has no influence on the underlying processes of the external database. The database is used exclusively for the monitoring of non-natural persons. No personal data are processed when it is used. The supplier is a professional party that must comply with the relevant laws and regulations.

• Safeguards

The General Administrative Law Act (Awb) requires the government's actions to be transparent and lawful. The Tax and Customs Administration observes the general principles of good governance when applying and developing algorithms.

The algorithm uses data collected under various tax laws. As required by the AVG, no more data is used than necessary.

Legal basis

• Corporation Tax Act 1969:
• Institution Decree CGVP
• Transfer Pricing Decree
• International pre-consultation decree

Links to legal bases

• Wet op de Vennootschapsbelasting 1969: : https://wetten.overheid.nl/BWBR0002672/
• Instelbesluit CGVP: https://wetten.overheid.nl/BWBR0040891/
• Verrekenprijsbesluit: https://wetten.overheid.nl/jci1.3:c:BWBR0046839
• Besluit Internationaal vooroverleg: https://wetten.overheid.nl/jci1.3:c:BWBR0042342

Elaboration on impact assessments

When using the database, no data traceable to the taxpayer in question will be used.

Operations

Data

• Functional data (for example: currency, maturity, geographical location, industry)
• Assets (e.g.: principal, inventory, working capital, (im)tangible assets)
• Risks (e.g.: credit rating, collateral, inventory turnaround, debtor payment terms)

Links to data sources

• Functionele gegevens (bijvoorbeeld: valuta, looptijd, geografische locatie, branche): Verrekenprijsdocumentatie opgesteld door de belastingplichtige / klantdossier.
• Activa (bijvoorbeeld: hoofdsom, voorraad, werkkapitaal, (im)materiële activa): Verrekenprijsdocumentatie opgesteld door de belastingplichtige / klantdossier.
• Risico’s (bijvoorbeeld: credit rating, zekerheden, doorloopsnelheid voorraden, betaaltermijn debiteuren): Verrekenprijsdocumentatie opgesteld door de belastingplichtige / klantdossier.

Technical design

See also under 'Purpose and impact' (tab 'General information').

The product is entirely maintained and managed by the database supplier. The Tax Administration employee can only use methods provided by the external supplier to use the database, such as using filters or using the tools provided by the supplier to make calculations. The results from the database are used to test, question, or establish the transfer price used.

External provider

Bloomberg & Orbis. The algorithm is not developed and/or maintained by employees at the Tax Administration. The entire management of the product lies with the external supplier.