Investment management tax update: year-end developments and attention points
As year-end 2024 is steadily approaching, we are pleased to offer you an overview of relevant Dutch tax developments and year-end attention points focused on the Investment Management industry. Most of the changes in Dutch tax law were already announced in previous years, but Budget Day 2024 still introduced some additional developments to be considered (also see our Website post). On some topics, most importantly the new Dutch tax entity classification rules, further updates may still be published before year-end 2024. Please feel free to reach out to your trusted Loyens & Loeff contact with any questions you may have with respect to these developments and attention points.
1. 2025 Dutch tax rates
1.1 Corporate income tax (CIT)
| 2024 | 2025 | |
| 19% rate | Profits up to EUR 200,000 | Profits up to EUR 200,000 |
| 25.8% rate | Profits exceeding EUR 200,000 | Profits exceeding EUR 200,000 |
Takeaway
In comparison to 2024, the applicable CIT rates will remain the same. The lower 19% rate can be applied per taxpayer, meaning that entities consolidated for CIT purposes in a so-called 'fiscal unity' (fiscale eenheid) can only make use of the lower rate once.
1.2 Real estate transfer tax (RETT) and related taxes
| 2024 | 2025 | 2026 | |
| Default RETT rate | 10.4% | 10.4% | 10.4% |
| Residential real estate (owner occupied) [1] | 2% | 2% | 2% |
| Residential real estate (investment and other purposes) [2] | 10.4% | 10.4% | 8% |
| Newly built residential and other VAT exempt use real estate - share deal [3] | Exempt | 4% | 4% |
Ad 1) A RETT exemption for (main residence) homes with a value lower than EUR 525,000 (2025) is available for first-time homebuyers between the age of 18 – 35.
Ad 2) Per 1 January 2026, the RETT rate for (non-owner occupied) residential real estate is expected to be lowered from 10.4% to 8%. This 8% RETT rate will only apply if at the time of acquisition, the acquired real estate is 'in its nature fit for residential purposes'. Consequently, it is not expected that the reduced rate of 8% will apply to the acquisition of existing non-residential real estate that - after acquisition - will be redeveloped to residential real estate. Recently, the Council of State has advised the Dutch Government against the introduction of the reduced rate of 8% as in their view the measure will unnecessarily increase the complexity of the RETT regime. The advice of the Council of State is however non-binding and the Dutch government can thus still decide to implement the new RETT rate.
Ad 3) Currently, newly built real estate can be acquired without VAT or RETT through a share deal. To ensure a level playing field, the RETT concurrence exemption for share deals of real estate companies owning real estate used for VAT exempt purposes will be abolished. To prevent overkill, a new 4% RETT-rate will be introduced for these types of transactions as per 1 January 2025.
Takeaways
Both 2025 and 2026 will see changes to the Dutch RETT rules that may have an impact on fund managers and investment funds pursuing a real estate investment strategy. Financial models should therefore be timely updated.
Note that an acquisition whereby none of the investors (alone or together with affiliated entities and/or affiliated natural persons) acquires an interest of more than 1/3rd is not subject to RETT (so-called 'club deals').
1.3 Personal income tax (PIT)
1.3.1 Box 1
| 2024 | 2025 | |||
| First bracket | < € 38,089 | 36.97% | < € 38,441 | 35.82% |
| Second bracket | ≤ € 75,519 | 36.97% | ≤ € 76,817 | 37.48% |
| Third bracket | > € 75,519 | 49.50% | > € 76,817 | 49.50% |
1.3.2 Box 2
| 2024 | 2025 | |||
| First bracket [1] | ≤ € 67,000 | 24.5% | ≤ € 67,000 | 24.5% |
| Second bracket | > € 67,000 | 33% | > € 67,000 | 31% |
Ad 1) The first bracket threshold is EUR 134,000 in case of a 'tax partner' (fiscaal partner).
Ad 2) In recent years, the Dutch Supreme Court has ruled that various frameworks of the current Box 3 regime, based on taxation of a fictious yield on a taxpayer's net wealth, is unlawful. As such, a new Box 3 regime will have to be introduced in the coming years, based on taxing actual returns generated by a taxpayer's net wealth. Recently, the Dutch State Secretary of Finance indicated that the introduction of a new Box 3 regime as from 1 January 2027 would not be feasible.
To comply with the Dutch Supreme Court rulings, until a new regime is introduced, taxpayers will, as from tax year 2025, be able to file an 'Actual Return Form' (Opgaaf Werkelijk Rendement), when their actual return generated on net wealth is lower than the fictitious yield calculated by the Dutch tax authorities. For more information, see also our Website post.
Takeaway
The expected change to the top Box 2 rate, should decrease the effective tax rate for (fund) managers holding their carried interest or equity instruments as part of a management incentive plan via a (personal) holding company.
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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.
