The taxation of the investment funds that are available in the Netherlands is done based on the type of fund selected for registration. Sinceinvestments funds are set up for developing investment activities in the financial sector, they are taxed following a different tax scheme than the one applicable to commercial entities.
Depending on the type of fund and the legal entity under which it operates, the investment vehicle can benefit from various tax exemptions; our accountants in the Netherlands can present the basic taxes available for investment funds and the tax exemptions investors can benefit from when investing in a Dutch fund. For example, specific types of funds can benefit from an exemption on the payment of the corporate income tax or the withholding tax applicable to the transfer of dividends.
The tax system that is imposed to a Dutch investment fund is based on the nature of the entity of the vehicle. Thus, the Dutch tax legislation differentiates between taxable joint accounts funds and tax transparent funds (in the case of those registered as public funds). In the case of a taxable fund for joint account (FGR), the fund will be imposed with the corporate income tax, applicable at the standard rate.
This type of fund will also be imposed with the withholding tax on dividends, which is generally applied at the standard rate of 15%, but exemptions can apply based on the investment principles followed by the fund; our Dutch accountants can provide more details concerning this matter. It is necessary to know that in the case of a tax transparent entity, the fund will be exempted from the payment of the corporate income tax. The Dutch funds can also benefit from the following:
Businessmen who want to register an investment fund in the Netherlands can receive full assistance on the registration requirements from our Dutch accounting firm; our accountants can provide advice on the taxation system and on the accounting principles and procedures that must be followed by all Dutch investment vehicles.
When investing here, besides knowing information on the tax and accounting systems applicable to these structures, investors must also take into consideration the value of the investment market, the main types of investment instruments used and the preferred investment entities. Foreign businessmen must know that in 2018 the Dutch investment market reached a record level; the main market characteristics are presented below:
The Alternative Investment Fund Manager Directive (AIFMD) is a comprehensive legislation available at the level of the European Union, which regulates the activity of fund managers. In this case, the corporate tax is applicable at a rate of 20%, but only as long as the yearly profits stand at a value of maximum EUR 200,000; our Dutch accountants can provide more details on the corporate tax system available in this case.
It is necessary to know that the income obtained from employment is taxed at a progressive rate, based on the value of the income, but certain tax reductions can be applied in this case under the 30% ruling. Investors are invited to contact our team of accountants in the Netherlands for further information on other tax principles applicable to Dutch investment funds.