Fund update and outlook
Yesterday, the Dutch Tax Plan 2026 has been adopted by the Dutch Senate, rendering a number of key tax measures final. In this newsletter, we set out the current state of play for funds, focusing on the extended transitional rules, the updated Fund Decree and the recently published consultation proposal.
As of 1 January 2025, both Dutch and non-Dutch partnerships are, as a main rule, treated as tax transparent for Dutch tax purposes, unless the partnership qualifies as a Fund for Joint Account (fonds voor gemene rekening – FGR). This also applies where the legal form is not identical to an FGR, but is considered comparable to an FGR for Dutch tax purposes. At the same time, an amended FGR definition has been introduced, aimed at excluding family funds from the scope of the FGR regime.
Over the past months, the Dutch tax rules for investment funds have been amended frequently and at high speed. Legislative amendments, policy decrees and consultation proposals have followed each another in quick succession, making it increasingly difficult in practice to determine which rules apply at a given moment.
1. Transitional rules: transparent classification, at least until 2027
The trigger for the recent developments was the new tax definition of an FGR. Following the announcement that Dutch and foreign legal forms may also qualify as an FGR, comparable (foreign) partnerships risked becoming subject to Dutch corporate income tax (CIT) as from 1 January 2025, potentially triggering taxation of hidden reserves.
Based on the transitional rules introduced at that time, this CIT exposure for the 2025 financial year could be avoided without amending the partnership agreements before 1 January 2025, provided that investors were informed in time and that the intention was communicated to amend the fund terms (including redemption provisions) during 2025.
The Ministry of Finance has since acknowledged that the current FGR definition leads to frictions in practice and is working towards a structural revision of the FGR regime by 2028 at the latest. To prevent temporary and unintended CIT exposure, extended transitional rules were proposed and have now been adopted by Parliament. These rules allow funds to remain tax transparent at least until 2027.
Initially, uncertainty existed regarding the scope of the transitional regime. Following parliamentary clarification and the adoption of an amendment, it is now clear that the transitional rules:
also apply to non-Dutch funds, irrespective of whether they derive Dutch-source income; and
also apply to funds established in 2025.
As a result, the transitional law offers clarity and stability until at least 2027, and no immediate pressure to amend fund documentation. Structural changes can be prepared carefully in anticipation of the envisaged reform of the FGR regime in 2028.
Please contact us if you wish to determine whether you qualify for the application of the transitional regime.
2. Updated Fund Decree (2 December)
On 2 December, an updated Fund Decree was published, providing further guidance on a number of issues that were previously unclear. While the decree offers additional direction, uncertainties remain.
The Dutch Financial Supervision Act (Wft)
The decree clarifies that a fund can only qualify as a non-transparent FGR if it qualifies as an investment fund (AIF) or UCITS within the meaning of the Dutch Financial Supervision Act (Wet op het financieel toezicht – Wft). This requirement is deemed to be met if the fund or its manager is registered with the Dutch Authority for the Financial Markets (AFM), either under a licence or an exemption. For EU funds, comparable registration with another EU supervisory authority may suffice. For non-EU funds, it remains unclear how this requirement can be substantiated.
It is explicitly confirmed that family funds thatexclusively raise capital within a closed family circle, fall outside the scope of the Wft and cannot qualify as an FGR.
Although uncertainty remains regarding the fiscal interpretation of the 1:1 Wft linkage, an AFM license or registration may support the position that a fund qualifies as non-transparent. For Wft regulated funds with both family members and third-party investors, the collective investment criterion is aligned with the AFM’s assessment. It remains unclear under which circumstances participation by a third party results in the loss of family fund status; this assessment must be made in line with Wft concepts. It is further assumed that a 1:1 Wft qualification implies the existence of transferable participation rights, which is a key component of the non-transparent FGR qualification.
Investing versus conducting a business
The updated Fund Decree further elaborates on the requirement that an FGR may only engage in normal portfolio management (investment activities). Where a fund conducts a material business enterprise, it cannot qualify as an FGR.
In a structure where one entity invests in another entity that carries out business activities, those activities are not automatically attributed to the investing entity for qualification purposes. Accordingly, investments by a fund in tax transparent partnerships (such as CVs or LPs) that conduct a business do not, in themselves, result in the fund being regarded as carrying on a business. A feeder fund that merely pools capital and invests into an operating partnership will therefore potentially qualify as an FGR, the assessment of whether an entity carries on a business is made on an entity-by-entity basis.
Additional guidance is provided for debt funds. A safe harbor has been introduced, subject to strict conditions (including borrower concentration limits, leverage caps and fee restrictions). In practice, many private debt funds will not meet these conditions, meaning that a facts-and-circumstances analysis remains required.
Redemption Fund (inkoopfonds)
A tax transparent classification can be secured when the fund qualifies as a Redemption Fund. This is the case when participation rights may only be transferred back to the fund itself. This may also be achieved through a secondary trading mechanism, provided that transfers are fiscally deemed to take place via the fund.
Previously, the concept of “transfer” was interpreted very strictly. The updated decree clarifies that the following transfers are not regarded as transfers, and therefore do not jeopardize Redemption Fund status:
transfers by universal succession;
transfers by inheritance;
transfers upon the creation or division of a marital community.
In addition, the decree confirms that an obligation to redeem is no longer required. It is sufficient that transfer is only possible to the fund, allowing the manager discretion to accept or refuse redemption requests.
3. Consultation proposal: new FGR definition (intended as from 2027)
On 15 December, a consultation was launched for a further amendment of the FGR regime. In addition to the existing transitional rules, the proposal introduces a statutory opt-out regime from CIT.
This opt-out regime allows funds that would otherwise qualify as an FGR to remain tax transparent, subject to three cumulative conditions:
a maximum of 20 ultimate investors;
an information obligation ensuring effective taxation at investor level; and
the opt-out may be applied only once per fund
A fund with, for example, 50 investors may therefore rely on the transitional rules to remain transparent until 2027 (see paragraph 1), but cannot apply the opt-out regime.
The proposal further amends the FGR definition by explicitly linking it to the Wft concepts of AIF and UCITS, with the aim of neutralising EU qualification differences. As a result, a foreign partnership with legal personality (such as a French SCPI) may qualify as an FGR if it is comparable to an FGR and not to a Dutch NV or BV. This reduces the relevance of how individual EU Member States have implemented the AIFMD.
However, significant questions remain, in particular whether the Wft test should be applied formally (licensing-based) or materially (based on factual characteristics), and how the rules apply to non-EU jurisdictions.
Conclusion
While the policy direction is clear, the practical application remains uncertain in many respects, particularly for international structures and non-EU funds. Until the legislation is finalised, a careful fund-by-fund assessment remains essential. The interaction between financial supervisory law and tax law often gives rise to inconsistencies that the legislator has failed to address.
What does remain unchanged is the position of the Redemption Fund: funds meeting the redemption criteria remain outside the scope of the FGR regime and are treated as tax transparent.
Key takeaways:
Funds may remain tax transparent under the transitional rules at least until 2027, regardless of the number of investors.
Family-only funds remain outside the FGR regime.
Qualification as a Redemption Fund remains a certain route to tax transparency and is unaffected by the proposed amendments.
Given the remaining uncertainties, it is often possible to support either a transparent or non-transparent tax classification, depending on the structure and objectives. We are happy to assist with the analysis and provide recommendations to ensure that the tax classification aligns with the intended outcome.