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01 Welcome
02 Introduction
03 Table of contents
04 AML/CFT
05 AIFM autorisations & registrations
06 SFDR
07 Further legal and regulatory developments
08 Tax
09 The Netherlands
10 Glossary
11 5 Questions to
12 Contacts
13 About AKD
14 Disclaimer

The Netherlands

Draft bill on the adaptation of FBI, FGR and VBI regimes

On 8 March 2023, the legislative proposal to amend the regimes of the fiscal investment institution (‘fiscale beleggingsinstelling’; “FBI”), the fund for joint account (‘fonds voor gemene rekening’; “FGR”) and the Dutch tax-exempt investment institution (‘vrijgestelde beleggingsinstelling’; “VBI”) was published for public consultation.

Proposed changes to the FBI regime as from 1 January 2025

As indicated in our previous updates (Q3 and Q4, 2022), the Dutch Ministry of Finance announced that an FBI can no longer benefit from the FBI regime if and insofar it invests directly in real estate. From 1 January 2025, the profits of an FBI that invests directly in real estate will be taxed at the regular corporate income tax (“CIT”) rate. The draft bill also provides for a (conditional) exemption for real estate transfer tax (“RETT”). The proposed exemption may – under certain conditions – apply from 1 January 2024 to 1 January 2025 to restructurings that are directly related to this real estate measure.

Proposed changes to the FGR regime as from January 2024

The qualification of an FGR as either tax transparent (‘closed’) or non-transparent (‘open’) is currently based on the so-called accession requirement (‘toetredingsvereiste’) or redemption requirement (‘inkoopvereiste’). An FGR is tax transparent if the participations in the FGR can only be transferred with the unanimous consent of all participants, or the participations may only be transferred by way of redemption by the FGR or the participations may only be transferred to a specific set of relatives. As a result of the tax transparency of the closed FGR, all of its income and capital gains are attributed to the participants as if they were investing directly in the underlying assets of the FGR. An FGR with freely transferrable participations is considered non-transparent and is subject to CIT and dividend withholding tax (“DWT”).

Under the proposal, an FGR will only be non-transparent if (i) it is supervised by the Dutch Central Bank (‘De Nederlandsche Bank’; “DNB”) and (ii) licensed or registered with the Dutch Authority for the Financial Markets (“AFM”). Family funds will usually not meet these conditions. An FGR will be qualified transparent in all other cases. By means of this proposal, the Dutch government proposes to align the definition of a non-transparent FGR with the definitions of investment institutions under the Financial Supervision Act (‘Wet op het financieel toezicht’ or “WFT”).

If the nature of an FGR shifts from non-transparent to transparent as a consequence of the proposal, the assets, and liabilities of the FGR are deemed to be transferred from the FGR to its participants at fair market value. Furthermore, the participations in such FGR are deemed to be disposed by the participants at fair market value for Dutch tax purposes. As these changes may result in immediate taxation, several facilities are being proposed for Dutch CIT, personal income tax and RETT purposes (including a deferral of payment).

Proposed changes to the VBI regime as from 1 January 2024

The Dutch government intends to exclude investment funds with limited participants from the scope of the VBI regime. The draft proposal therefore also proposes to align the VBI regime with the definitions of regulated investment institutions. This means that only investment institutions within the meaning of the WFT will still be eligible for the VBI status, in line with the changes to the FGR regime. VBIs used by families will most likely not qualify anymore.

Under the VBI regime, qualifying VBIs are fully exempt from Dutch corporate income tax as well as from Dutch DWT.

Changes suggested by the European Parliament to ATAD3

As announced in our earlier quarterly update (Q1 2022), on 22 December 2021 the European Commission (“EC”) published the ‘Unshell Proposal’ (also known as “ATAD3”) to combat the misuse of shell entities for tax purposes. In January 2023, the European Parliament (“EP”) made several suggestions to the EC on its proposal.

The two welcome suggestions investment managers, among other parties, welcome most are the following:

- Based on the wording of the suggestions of the EP, only the outsourcing of the day-to-day operations and decision-making to third parties (i.e., non-related parties) can result in a company becoming a ‘shell’ (as opposed to of the earlier wording of the EC which suggested that outsourcing within the group or to related parties may also lead to a company being considered a ‘shell’).

- The EP suggests softening the requirement that a company needs to have its own premises or premises for exclusive use by adding that premises shared with entities of the same group should also suffice.

Apart from these suggestions relevant for investment management, other more general suggestions have been made. Unfortunately, the EP did not advise on broadening the exclusion from ATAD3 for AIFs by also including entities controlled by AIFs.

Currently, the EC is working on an updated version of ATAD3. There is no obligation for the EC to adopt these suggestions.

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