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On 9 December 2022, the Dutch Ministry of Finance announced that the abolishment of the Dutch
REIT regime will be postponed from 1 January 2024 to 1 January
2025. The motivation behind this postponement is to give Dutch
REITs and their institutional investors additional time to
As an example of institutional investors that may want to
restructure, the Dutch Ministry of Finance mentions pension funds
that would be exempt from Dutch corporate income tax on income and
gains derived from a direct investment in real estate located in
the Netherlands. As a restructuring could trigger Dutch real estate
transfer tax, a transitional measure will be introduced effective 1
January 2024. This measure will broadly consist of a conditional
exemption from Dutch real estate transfer tax during 2024 for
transfers that are executed in direct relation to the abolishment
of the Dutch REIT regime.
A legislative proposal to this effect will be published and
consulted in the first quarter of 2023. The legislative proposal
will subsequently be submitted for Parliamentary approval on Dutch
Budget Day 2023 (i.e., 19 September 2023).
The statement by the Dutch Ministry of Finance that direct real
estate investments held by pension funds can benefit from an
exemption from Dutch corporate income tax is generally true. As
such, it makes sense to restructure out of the Dutch REIT regime. A
direct investment for Dutch corporate income tax purposes can also
be achieved via a tax transparent vehicle.
Dutch REITs are also commonly used as investment vehicles by
foreign pension funds that do not meet all the requirements to
benefit from the Dutch corporate income tax exemption for pension
funds. For these foreign pension funds, the abolishment will lead
to a different tax position going forward. The same holds true for
institutional real rate investment funds that make use of Dutch
An overview of the tax mechanics, reasons for the abolishment
and what to consider looking ahead can be found in our publication
‘Abolishment Dutch REIT Regime: Looking
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.
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