As of 1 January 2025, the Dutch tax classification of partnerships has shifted. The main rule is that both Dutch and non-Dutch partnerships are considered transparent for Dutch tax purposes, unless they qualify as a fund for joint account (fonds voor gemene rekening, FGR). The definition of an FGR has also been revised, with the removal of the former “consent requirement” for the transferability of participation rights. Instead, the focus is now on whether the fund qualifies as an investment fund or a fund for collective investment in securities under the Dutch Financial Supervision Act (Wet op het financieel toezicht, Wft).

If a non-Dutch entity (e.g. a limited partnership) fulfils the conditions of an FGR, then this comparison takes preference over the potential comparison to the Dutch CV. This means the non-Dutch entity will be qualified as equivalent to the FGR and thus be non-transparent for Dutch tax purposes. 

For a more general description of the Dutch 2025 classification rules, we refer to our previous article on this topic: The 2025 Dutch tax classification of the Brazilian FIP | Global law firm | Norton Rose Fulbright.

1. Investment fund qualification

To be classified as an FGR, a fund must qualify as an “investment fund” (AIF) or a “fund for collective investment in securities” (UCITS) under the Wft. The Decree clarifies that registration with the Dutch Financial Markets Authority (AFM) — either through a license or an exemption — serves as evidence of this status. For EU-based funds, comparable registration or licensing in another member state is sufficient. However, the Decree does not provide further guidance for funds established outside the EU.

2. Family funds excluded

Funds that raise capital exclusively from a pre-existing group of family members are explicitly excluded from the scope of the Wft and, by extension, cannot qualify as FGRs. The Dutch tax authorities follow the AFM’s interpretation on this point.

3. Portfolio management: What is “normal”?

The fund’s activities must constitute “normal” portfolio management, as opposed to entrepreneurial or value-adding activities. The Decree provides guidance for funds investing in tax-transparent limited partnerships and in loans:

• Investments in CVs: Participation in a CV that operates a business does not automatically mean the fund itself is considered to be running a business. The fund can still meet the investment criteria for FGR status.
• Lending activities: Lending by funds is generally assessed on a case-by-case basis. However, the Decree introduces a “safe harbor” for loan portfolios: if no more than 10% of assets are lent to a single borrower, no more than 15% are invested in lower-rated loans (unless the fund’s risk rating is low), leverage is capped at 20%, management fees do not exceed 1% per year, and there is no performance-based compensation, the fund’s lending activities are deemed “normal” portfolio management. Most private debt funds may not meet all these conditions, so individual assessment remains important.

4. Transferability of participation rights

To qualify as an FGR, participation rights must be “tradeable.” If rights can only be transferred back to the fund itself (a so-called “Redemption Fund”), the fund is not an FGR. The Fund Decree emphasizes that fund terms must explicitly state any redemption rights or restrictions on transferability. As welcome new guidance, the Fund Decree provides that certain transfers — such as by universal succession, inheritance or marital division — are disregarded in this assessment. In multi-layered (stacked) fund structures, each fund is assessed independently.

5. Reverse hybrid entities

A Redemption Fund may still be classified as a reverse hybrid entity if at least 50% of ownership is held by related parties in jurisdictions that treat the entity as non-transparent. However, we note that an FGR cannot be a transparent entity under Dutch law (as it will always classify as non-transparent once qualified as FGR).

Key takeaways of the 2025 Fund Decree

• Registration as an investment fund (AIF or UCITS) with the AFM or a comparable EU authority is now a decisive factor for FGR status. For funds located outside the EU, the Fund Decree does not provide further guidance in this regard.
• Funds that only accept capital from family members are explicitly excluded from the FGR regime.
• The Fund Decree introduces strict “safe harbor” criteria for funds investing in loans: diversification, risk, leverage, and fee limits must be met for lending to qualify as normal portfolio management. If these criteria are not met, the fund’s activities will be assessed individually.
• Investing in a CV (limited partnership) that operates a business does not automatically disqualify a fund from being an FGR. The fund itself is not considered to be running a business solely due to such investments.
• Participation rights must be transferable to third parties. If rights can only be redeemed with the fund itself, the fund cannot be an FGR. The Fund Decree also clarifies which types of transfers are disregarded in this assessment (e.g., by universal succession, inheritance, marital division).
• In multi-layered fund structures, each fund is assessed separately for its FGR or Redemption Fund status.
• Transitional rules are in place for funds affected by the new definitions, and further legislative changes are expected in the coming years.

Looking ahead

The Dutch government is considering further legislative changes to address remaining uncertainties, with a public consultation expected before the end of 2025 and possible new rules taking effect no earlier than 1 January 2027. In the interim, transitional (grandfathering) rules may offer relief for funds affected by the new definitions.

Should you require any assistance with the qualification of your investment structure, feel free to contact a member of the Norton Rose Fulbright tax team.