The Dutch lower house has recently adopted a bill aimed at improving the tax climate for Dutch investment funds. The bill introduces a new regime for tax exempt investment funds (vrijgestelde beleggingsinstelling or VBI). A VBI will be fully exempt from Dutch corporate income tax and dividend withholding tax. With the introduction of the VBI regime, the Dutch Ministry of Finance aims to make the Netherlands more attractive for the establishment of investment funds. With the envisaged changes the Netherlands is firmly back on the short lists as alternative for Luxembourg and Ireland based investment funds.
In addition to the new VBI regime the bill provides for beneficial amendments to the existing facilitated tax regime for investment funds (fiscale beleggingsinstelling or FBI). The VBI regime will co-exist alongside the existing FBI regime. A separate bill facilitating investments in real estate and real property development under the FBI regime will also be discussed.