The Dutch Finance Minister has submitted to parliament a proposal to amend Dutch tax laws in connection with the implementation of the UCITS IV Directive.
Tax residency
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.
FBI status
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.
It is expected that the above amendments in Dutch tax laws will come into force on the 1st of July 2011.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
