NETHERLANDS Law and Practice Contributed by: Michael Molenaars, Jeroen Smits, Reinout de Boer and Rogier van der Struijk, Stibbe
VOFs As a VOF is tax transparent, it is not a taxpayer for Dutch (corporate) income tax purposes. Instead, the underlying participants are taxed for their participa - tion in a VOF. Distributions by a VOF are not subject
prevent a brief period of tax liability regarding the period in between. A draft legislative proposal to amend the definition of an FGR (and to include a vol - untary de-registration scheme for the FGR) was under consultation until 2 February 2026. It is not yet clear whether the proposed amendments will be included in a (potential) legislative proposal. Foreign Vehicles Specific guidance is in place, by way of a decree, to classify foreign vehicles (both transparent and non- transparent) for Dutch tax purposes. New tax clas - sification rules for foreign entities have also entered into force as of 1 January 2025. Under the new rules, it must still first be determined whether a foreign entity is sufficiently similar to a Dutch entity (the similarity approach). If so, the tax classification of the entity’s Dutch equivalent will be applied. If this is not the case, two additional methods to classify foreign entities have been introduced. First, foreign entities without a clear Dutch equivalent that are resident in the Neth - erlands are deemed to be non-transparent (the fixed method). Second, for foreign entities located outside of the Netherlands, the symmetrical approach gener - ally applies, meaning that the tax classification of the jurisdiction where the entity is located will be followed for Dutch tax purposes. As the similarity approach will continue to apply to for - eign legal entities that can be compared to Dutch legal entities and given the above-mentioned amendments to the classification rules for CVs/FGRs, the Nether - lands will in principle also classify foreign partnerships that are similar to Dutch partnerships as transparent for tax purposes from 2025 onwards. Nonetheless, provided certain conditions are met (eg, whether or not it is regulated and whether its activities consist of holding passive investments), a foreign partner - ship may also qualify as an FGR and thus still qualify as non-transparent for Dutch tax purposes under the qualification rules applicable to FGRs, which might result in a hybrid mismatch. Therefore, the aforemen - tioned voluntary de-registration scheme has been pro - posed as a remedy in the draft legislation proposal which was under consultation until the beginning of February 2026.
to Dutch DWT. CVs and FGRs
With respect to a CV or an FGR, up to and includ - ing 2024, the Dutch corporate income tax treatment depended on whether the entity was considered open or closed. An open CV/FGR was subject to Dutch cor - porate income taxation as such, whereas in the case of a closed CV/FGR, the underlying participants were taxable for the income derived from their interest in the CV/FGR. A CV or an FGR was (in short) deemed to be closed (ie, transparent) if all limited and general/man - aging partners separately and upfront had to approve each accession, resignation or replacement of par - ticipants (the “unanimous consent requirement”). Alternatively, an FGR was also considered closed if participations could be transferred exclusively to the FGR itself. However, on 1 January 2025, new classification rules for (among other entities) Dutch CVs and FGRs entered into force. These rules entail the abolition of all Dutch non-transparent partnerships by revoking the “unanimous consent requirement”. Consequently, Dutch CVs are by default transparent for Dutch tax purposes as of 1 January 2025. The tax classification rules for the FGR have also changed as of that date. An FGR can be either transparent or non-transparent for Dutch corporate income tax purposes. An FGR may maintain its non-transparent status only if it is regulated following the Dutch Financial Supervision Act and if the participations in the FGR are tradeable. Participations are not considered tradeable if the sale can only be to the FGR – ie, where it acts as a “repur - chase fund”. Until 28 February 2026, it was possible for an entity that was deemed to be transparent until 1 January 2025 to opt to utilise a transitional provision to (tem - porarily) not be treated as an FGR (provided the rel - evant conditions were met) after that date until new classification rules entered into force (or if sooner, until 1 January 2028). This transitional provision aimed to
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