Netherlands: Proposed changes to legal forms, possible tax implications

Netherlands: Proposed changes to legal forms

An internet consultation concerns a proposal that would affect the legal form of conducting business.

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The proposal was introduced because the current qualification policy often causes international mismatches.

Under the proposed changes, purely domestic situations in which there are no mismatches would also be affected—in particular, open limited partnerships (open commanditaire vennootschappen) and mutual funds (fondsen voor gemene rekening). As proposed, beginning 1 January 2022, open limited partnerships would be transparent. Whether mutual funds will be open or closed under the new rules would depend on the new legal criteria that would apply.

The proposal may have implications for:

  • Existing investment structures in which a fund has the status of fiscal investment institution (fiscale beleggingsinstelling)
  • Structures that were set up in connection with the ultimate beneficial owner (UBO) register
  • In order to invest Box 3 investment capital in Box 2

If a legal form is qualified differently, this could in principle result in tax claims having to be settled. However, transition rules would offer opportunities for avoiding the settlement of these tax claims. In some instances a restructuring would be required (and that would have to take place in 2021).

Read a March 2021 report prepared by the KPMG member firm in the Netherlands that examines the main features of the consultation proposal. 

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