The 2024 Dutch tax plan: Impact on businesses

Introduction

On 19 September 2023, the Dutch Ministry of Finance published its 2024 Tax Plan (Belastingplan 2024). Because of the outgoing administration, no politically sensitive topics are included, but still the 2024 Tax Plan consists of fifteen different proposals of law with three overarching policy goals, being (i) balancing revenues and additional spending through targeted tax measures, (ii) taking steps toward a better and simpler tax system and (iii) contributing towards climate goals and business climate. Most provisions of the 2024 Tax Plan are supposed to enter into force on 1 January 2024 (unless otherwise indicated).

In this note, we discuss the topics that we feel are most relevant to the international business community:

• No changes to the main Dutch tax rates
• Limitations for individuals investing through Funds for Joint Account and Exempt Investment Institutions
• Changes to the Dutch entity tax classification rules (as of 2025)
• No Dutch “FBI” (REIT) regime for Dutch real estate investments (as of 2025)

Note that the proposals are currently subject to parliamentary review and are therefore subject to change. It is already announced that as part of the current parliamentary review more details will follow with respect to the anti-dividend stripping rules through a subsequent amendment.

No changes to the main Dutch tax rates

Contrary to previous years, no amendments are proposed to the Dutch corporate income tax (CIT) rates: The first bracket applies to taxable amounts up to € 200,000 and the rate remains at 19%. Companies will pay the top CIT rate of 25.8% on those taxable amounts over € 200,000. The VAT rates and the RETT rates will also not be amended.

Limitations for individuals investing in Fund for Joint Account (FGR) and Exempt Investment Institution (VBI)

This proposal adjusts the definitions of the Dutch Fund for Joint Account (fonds voor gemene rekening; FGR) and the Dutch Exempt Investment Institution (vrijgestelde beleggingsinstelling; VBI). For FGRs, the consent requirement (toestemmingsvereiste) will no longer be decisive when verifying the tax status of the FGR, but instead the status of an FGR will depend on the concept of “Fund for Joint Account” used in the Dutch Financial Supervision Act (Wet op het financieel toezicht; WFT). Similarly, the definition of the VBI will be aligned with the definition of “Investment Institution” as described in the WFT. The proposed amendments aim to prevent individuals (i.e. primarily by high net worth individuals and wealthy families) from using these schemes to avoid Dutch taxation and should bring both regimes more in line with their original objectives.

Dutch entity tax classification rules (as of 2025)

Originally, the Dutch Ministry of Finance intended changing the Dutch entity classification rules as of 1 January 2022 to reduce mismatches with foreign entity classification rules. This was in relation to the classification of Dutch and foreign entities as either tax-transparent or opaque.

Currently new entity classification rules are proposed, consisting of two methods:

• Fixed method (for entities resident in the Netherlands): A non-Dutch entity that is resident in the Netherlands and whose legal form is not comparable to that of a Dutch entity will always be classified as non-transparent and therefore independently subject to tax.
• Symmetrical method (for entities resident outside the Netherlands): The Netherlands will follow the classification made by the foreign jurisdiction for non-Dutch-resident entities incorporated or entered into under foreign law that are not comparable to a Dutch entity and that either own an interest in a Dutch entity or in which a Dutch entity owns an interest.

The new Dutch entity tax classification rules are effective with effect from 1 January 2025. Certain transitional arrangements will be introduced as of 1 January 2024, which should allow funds for joint account, open limited partnerships and the participants in such entities to restructure tax-free during 2024.

No “FBI” (REIT) regime for Dutch real estate investments (as of 2025)

As of 1 January 2025, the government will introduce a measure in corporate income tax on the basis of which Dutch fiscal investment institutions (FBIs) are no longer allowed to invest directly in Dutch real estate. This means that any income or profits that such FBI derives from the direct ownership of Dutch real estate investments will generally become subject to Dutch corporate income tax at the regular rates. This real estate measure will have a large impact on existing FBIs. The government recognised that some FBIs may want to restructure their real estate investments in advance and such restructuring could become subject to real estate transfer tax (RETT). To avoid this levy, the government is proposing a temporary exemption from RETT to allow affected FBIs to restructure. This temporary exemption will be valid from 1 January 2024 to 31 December 2024. Conditions apply to qualify for this exemption.