The Netherlands - Tax

Several legislative proposals, as included in our 2023 Q2 and Q3 updates, have been amended and/or adopted prior to year-end 2023. On 19 December 2023 the following the legislative proposals have been adopted:

(i) Adjustments to the limited partnership (‘commanditaire vennootschap’, “CV”) and Dutch mutual funds (‘fonds voor gemene rekening’, “FGR”) regimes to decrease international hybrid mismatches will enter into effect on 1 January 2025. Several complementary measures are introduced as of 1 January 2024 to facilitate restructuring of affected taxpayers during calendar year 2024.

(ii) The VBI regime (‘vrijgestelde beleggingsinstelling’; “VBI”) will as of 1 January 2025 exclude investment funds with limited participants. VBIs used by families as an investment vehicle will likely not qualify for the VBI regime anymore.

(iii) A fiscal investment institution (‘fiscale beleggingsinstelling’; “FBI”) can no longer benefit from the FBI regime if it invests directly in Dutch real estate as of 1 January 2025. In conjunction with this proposal, a temporary conditional exemption for real estate transfer tax is applicable from 1 January 2024 through 31 December 2024.

(iv) Two additional rules against dividend stripping are implemented as of 1 January 2024. First, the burden of proof for a dividend tax exemption/refund shifts from the inspector to those seeking an exemption/refund. Furthermore, the provision that determines entitlement to dividend tax benefits based on the record date is included into the 1965 Dividend Tax Act.

As indicated before, a comprehensive review of these legislative measures can be found in our previous quarterly updates (2023 Q2 and Q3).