On 5 July 2011, the Dutch Senate adopted the legislative proposal implementing the UCITS IV Directive. It is expected that the implementation of the UCITS IV Directive into Dutch law will come into effect within the next couple of weeks.
Together with the implementation of the UCITS IV Directive, two amendments facilitating UCITS IV from a Dutch tax perspective will come into effect.
The UCITS IV Directive allows a management company to manage UCITS which are established and supervised in another country. The proposal establishes that for Dutch tax purposes these UCITS will be deemed to have their place of management in such country and therefore will not become a tax resident of the Netherlands even if they would have their actual place of management in the Netherlands.
The UCITS IV Directive allows UCITS to invest at least 85% of their assets in other UCITS, thus enabling master-feeder structures. The Dutch Corporate Income Tax Act is amended in order to allow non-Dutch feeder-UCITS to invest in Dutch master-UCITS which qualify as fiscal investment institutions (fiscale beleggingsinstelling or "FBI"). The Dutch Finance Minister expects that Dutch master-UCITS will opt for the FBI regime in order to benefit from the international tax treaties entered into by the Netherlands. Master-feeder structures could play an important role in the ongoing consolidation of investment funds in the EU, especially in those cases in which cross-border mergers are not feasible e.g. as a result of taxation.