Taxation of Funds in the Netherlands

Professional investors interested in the Dutch investment funds market can set up various types of vehicles. Among these UCITS and AIF funds are the two common types of investment funds which can also be marketed at EU level.

One of the most important aspects related to setting up an investment fund in the Netherlands is its taxation. From this point of view, the Netherlands is quite an attractive jurisdiction.

Our Dutch company formation advisors can explain how investment funds are taxed in this country.

Investment funds tax treatment in the Netherlands

Dutch investment funds can fall under one of the following tax categories:

• - the tax-exempt investment fund;
• - the fiscal investment fund;
• - the tax transparent fund.

Each of them will benefit from certain tax advantages.

The Dutch exempt investment fund

Open-ended retail funds and hedge funds can enter the category of exempt investment funds which benefit from exemptions from the Dutch corporate and withholding taxes. In order to benefit from these exemptions, these must comply with certain requirements, one of the most important ones being to have a license issued by the Dutch Financial Authority.

The taxation of fiscal investment funds in the Netherlands

Fiscal investment funds will benefit from a 0% rate on the corporate tax. They will also be subject to a 15% withholding tax applicable to the distribution of dividends unless a double tax treaty signed by the Netherlands provides otherwise. One of the conditions for this tax treatment is for the fund to be registered as a Dutch private or public limited liability company.

Our company registration agents in the Netherlands can help foreign investors who want to register investment funds in this country.

The tax transparent fund in the Netherlands

From a taxation point of view, a Dutch investment fund can be transparent if:

• - it is not deemed as a legal person from a corporate and withholding taxes point of view;
• - it is registered as a closed investment fund for joint account (FGR);
• - the fund or its manager has no registered seat in the Netherlands;
• - the fund does not have a license from the Dutch Financial Supervisory Authority.

For full information on the taxation of investment funds in the Netherlands, please feel free to contact us.