BUREN (The Netherlands) Article: Changes in Dutch Tax Treatment of Dutch Partnership (CV) and Investment Funds (FGR, FBI, VBI) Postponed to 1 January 2025

On 8 May 2023, the Dutch Ministry of Finance announced that the expected date of entry into force of certain legislative changes in the Dutch tax treatment of partnerships and specific investment fund regimes FGR (fund for joint account), FBI (the fiscal investment institution) and VBI (the exempt investment institution) will be deferred from 1 January 2024 to 1 January 2025. This allows taxpayers to consider restructuring alternatives. The final legislative proposals are expected to be published for the occasion of Budget Day 2023 on 19 September 2023.

Dutch partnerships

Following a legislative proposal which was published for consultation in 2021 the Dutch government announced to change the entity tax classification rules. The tax classification of a limited partnership under Dutch law as a tax transparent or opaque entity under current rules depends on whether or not both the admission and substitution of partners is subject to the prior unanimous approval of all partners (the so-called prior consent requirement). With the Netherlands following the similarity approach when classifying an equivalent legal form under foreign law, this approach in practice often resulted in mismatch situations and undesirable tax consequences when classifying foreign entities.

Under the proposed rules as the default a limited partnership under Dutch law would always be treated as transparent for Dutch tax purposes. In other words, the so-called prior consent requirement would no longer be relevant. With the similarity approach continuing to exist the proposed change would also be relevant for the qualification of foreign limited partnerships and other foreign entities.

With the default rule being that a limited partnership is tax transparent, existing limited partnerships that are structured as opaque shall by operation of law convert into a tax transparent entity which shall result in a deemed disposal of assets which is a taxable event. Deferral rules are expected allowing taxpayers in scope to assess possible restructuring alternatives.


There are currently three types of FGRs: (i) a FGR in which participations are only transferable to other participants following prior unanimous consent (tax transparent), (ii) a FGR in which the participations can only be repurchased by the FGR (tax transparent) and (iii) a FGR with transferable participations (opaque). Under the proposed rules a FGR can remain either an opaque or transparent entity.

Under the proposed rules as the default a FGR would in principle be treated as transparent for Dutch tax purposes. An exception applies to a FGR which qualifies as a regulated investment institution within the meaning of the Act on Financial Supervision and where the entitlement in the FGR can be evidenced by way of transferable units. Such FGR will be treated as opaque. Under the proposed rules, units are non-transferable if transfer is only possible by way of redemption to the FGR itself. The changes in transparency rules for a FGR would also be relevant for the qualification of foreign entities that are comparable to a FGR. Deferral rules are expected allowing a FGR in scope to assess possible restructuring alternatives.


On Budget Day 2022 the Dutch government already announced its intention to no longer allow the FBI to invest directly in Dutch and foreign real estate. This measure will be delayed until 1 January 2025. The proposed changes in legislation have now been specified. The most important changes include:

  • Profits derived by a corporate income taxpayer with FBI status from Dutch real estate investments will be subject to Dutch corporate income tax.
  • The current requirement that a FBI shall not be financed with more than 60% of the book value of the real estate with debt will amended. Under the new rules, the scope of the limitation of debt funding rules will apply to all portfolio assets. Debt funding should be limited to maximum 20% of the value of the portfolio assets.
  • A temporal exemption from real estate transfer tax may apply in the year 2024 for restructurings directly related to the above measure, subject to certain conditions.


A measure has been proposed to restrict access of the VBI regime to corporate income taxpayers which qualify as a regulated investment institution within the meaning of the Act on Financial Supervision. A VBI which does not fall under this scope will lose its VBI status.


In view of the continuously changing Dutch an international tax landscape, it is recommended to monitor the (future) efficiency of partnership arrangements and investment fund vehicles and whether additional actions should be taken in order to remedy any expected adverse Dutch tax consequences.