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In brief

As of 1 January 2025, the Netherlands will introduce new rules with respect to the qualification of legal forms as either transparent (look-through/disregarded entity) or non-transparent (separate taxpayer/regarded entity) from a Dutch tax perspective.

An important change is that Dutch limited partnerships (“CVs“) and comparable foreign partnerships will be considered transparent from a Dutch tax perspective, even if the participations are freely transferable.
Under the new rules, foreign legal forms should be compared to Dutch legal forms. Recently, the Dutch legislator published a draft ‘Decree Comparing Foreign Legal Forms’ (Besluit vergelijking buitenlandse rechtsvormen) (the “Comparability Decree“) for online consultation. The Comparability Decree provides further guidance on when a foreign legal form is considered comparable for Dutch tax purposes. We expect that the final Comparability Decree will be published in the course of 2024.


We recommend reviewing your structure and confirming the impact of the new qualification rules. If the new qualification rules adversely impact your structure, then we advise to take action as soon as possible to benefit from the transitional law in 2024. 

Please reach out to your Baker McKenzie contact person.

Changes to the qualification of Dutch CVs and comparable foreign legal forms from a Dutch tax perspective

Under current law, a Dutch CV or comparable foreign partnership can be either transparent or non-transparent from a Dutch tax perspective, depending on whether the entry, exit and replacement of limited partners is only possible with consent of all (general and limited) partners. This is known as the “unanimous consent requirement”. As of 2025, the unanimous consent requirement will be abolished. Consequently, all Dutch CVs and comparable foreign partnerships will in principle be considered transparent for Dutch tax purposes.

Following the abolishment of the unanimous consent requirement, Dutch CVs and comparable foreign partnerships that are currently non-transparent will become transparent. As a result, they are deemed to transfer all assets and liabilities to the investing limited partners at fair market value. For Dutch tax resident CVs and comparable foreign partnerships, any gain realized on the deemed transfer is in principle subject to Dutch corporate income tax. In addition, the investing limited partners are deemed to dispose their interest in the Dutch CV or comparable foreign partnership at fair market value which could also trigger a taxable gain in the Netherlands. 

To avoid immediate taxation as a consequence of the new rules becoming effective, transitional law provides for roll-over relief and other facilities (e.g., share-for-share merger facility and payment in installments). The transitional law is effective from 1 January 2024 to 31 December 2024.

Step plan to determine whether a foreign legal form is transparent or non-transparent under the new rules
Under the new rules, the following step plan can be followed to determine if a foreign legal form is considered transparent or non-transparent from a Dutch tax perspective:

1. Determine if the foreign legal form is comparable to a Dutch legal form based on the Comparability Decree. If so, then the Dutch tax qualification of the foreign legal form as either transparent or non-transparent is the same as the Dutch tax qualification of the comparable Dutch legal form. For example: foreign legal forms that are comparable to a Dutch limited liability company (BV) are considered non-transparent from a Dutch tax perspective under the new rules. As mentioned, foreign legal forms that are comparable to a Dutch CV or other partnership are considered transparent from a Dutch tax perspective under the new rules.

2. If the foreign legal form is not comparable to a Dutch legal form based on the Comparability Decree, then two additional qualification methods apply:

i. If the foreign legal form is tax resident of the Netherlands, then the foreign legal form will be considered non-transparent (i.e. a corporate income taxpayer in the Netherlands).

ii. If the foreign legal form is not tax resident of the Netherlands, then the Netherlands will follow the tax qualification from the jurisdiction in which the foreign legal form is tax resident.

In the explanatory notes to the new rules, the Limited Liability Partnership (LLP) under British law, the Unlimited Company (ULC) under Irish law and the Kommanditgesellschaft auf Aktien (KGaA) under German law are specifically mentioned as examples of entities that are not comparable to a Dutch legal form. That means that the Netherlands will follow the qualification as transparent or non-transparent from the jurisdiction in which such entity is tax resident, provided that the entity is not tax resident of the Netherlands.

Recommended actions 

The new rules may impact structures involving Dutch legal forms or Dutch investors, particularly:

1. Structures that involve a Dutch CV that is currently non-transparent from a Dutch perspective.

2. Structures that involve a foreign legal form that is comparable to a Dutch CV, which is currently non-transparent from a Dutch perspective.

3. Structures that involve a foreign legal form that is not comparable to a Dutch legal form.

We recommend reviewing your structure and confirming the impact of the new qualification rules. If the new qualification rules adversely impact your structure, then we advise to take action as soon as possible to benefit from the transitional law in 2024. 

Please reach out to your Baker McKenzie contact person.

Author

Henrik Stipdonk is a counsel in the Amsterdam Tax Practice Group and a member of the US Focus Group. He concentrates on Dutch and international tax law. Henrik has a strong focus on advising US multinationals and private equity firms on complex direct tax matters and practiced tax law for several years in Chicago. After he started his career at Baker McKenzie in 2008, he worked several year at a big four company. He returned to Baker McKenzie in 2019.

Author

Wouter is a senior associate and experienced tax lawyer who regularly advises multinational enterprises on Dutch national and international tax law. He has extensive experience in design and implementation of cross-border restructurings, investment structures, mergers and acquisitions, APA/ATR-advice and general tax advice for multinationals.
Wouter started his career at Baker McKenzie in 2015. In 2019, he left the Firm to work as a flight attendant for KLM Royal Dutch Airlines and worked for some time at a major Dutch law firm. He rejoined Baker McKenzie in 2022.

Author

Jorn Nagtegaal is a junior associate within Amsterdam Direct Tax team. He joined the Firm in January 2021.

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