Introduction

Spurred on by the famous Dutch football player Johan Cruijff, the Dutch Government wishes to support organisations that contribute to general public benefit and welfare and which give something back to society. Accordingly, a relatively new tax regime called the "ANBI-regime" has become available to charitable organisations. The ANBI-regime is a beneficial tax regime that can be of interest to Dutch and international clients, both corporates and wealthy families, seeking to structure their private funds for international charitable purposes.

ANBI-regime requirements

The ANBI-regime applies to organisations that officially qualify as an 'organisation for public benefit' (algemeen nut beogende instelling or "ANBI"), which are often foundations. To qualify as an ANBI, an organisation should be a tax resident of the Netherlands, Aruba, an EU Member State or a country that exchanges tax information with the Netherlands. Furthermore, the organisation must meet a number of requirements to qualify and register as an ANBI, of which the most important are set out briefly below:

  • 90% of the ANBI's activities should be aimed at and pursued for serving the public benefit. Commercial activities may be allowed if these activities are subordinate and of an auxiliary nature, and provided also that earnings from such commercial activities are fully used for public benefit purposes.
  • the ANBI is not allowed to 'hoard up' equity, which means that the equity of the ANBI should not excessively exceed the amount of equity reasonably necessary for the ANBI to ensure the continuation of its activities.
  • the ANBI must have a current policy plan (beleidsplan) which substantiates how the ANBI-regime requirements are met. This policy plan will be assessed by the Dutch tax authorities to help determine whether the ANBI status can be granted or maintained.
  • the ANBI's capital may not be available to board members or policymakers as if it is their own capital. This effectively means that no person or entity may have a controlling vote or interest in the ANBI.

Beneficial tax treatment

For Dutch gift tax purposes (nominal tax rates vary from 20%-40%), qualifying as an ANBI ensures that an organisation is fully exempt from Dutch gift tax (i) on donations or inheritances received generally, provided such funds are used for public benefit activities, and (ii) on donations received specifically for public benefit activities. For Dutch corporate income tax purposes, organisations that qualify for ANBI-status may be fully exempt if they do not run a business which competes with other businesses. Furthermore, donations made to an ANBI could be deductible for (corporate) income tax purposes for the contributor.

An additional benefit of the ANBI-regime is the official recognition of the organisation as an ANBI and the corresponding registration as such on a list that is published online by the Dutch tax authorities and available to everybody seeking to support the organisation.

The benefits of the ANBI-status create a regime that is ideally suitable for both international and Dutch corporations and wealthy families seeking to contribute to the public benefit in a tax efficient manner, and Bird & Bird's tax team in The Hague, the Netherlands have advised multiple organisations in structuring their worldwide charitable activities and establishing organisations with ANBI-status. This includes our experience in drafting a policy plan that is in line with the ANBI-regime requirements. For international corporations, the administrative procedures associated with obtaining and maintaining ANBI-status are normally handled by specialist Dutch service providers with which Bird & Bird have established relationships.