On 15 September 2026, Budget Day, the Dutch government presented the Tax Plans 2027. The proposed measures are broadly in line with earlier announcements and contain relatively few developments relevant to Dutch pension funds. For a full overview of the proposed measures and developments, we refer to our general website post on the Dutch Tax Plans 2027: a predictable package in a minority government setting.

The most notable proposal is the introduction of a new refund mechanism for Dutch dividend withholding tax borne by Dutch investors, including pension funds, that invest in Dutch shares indirectly through certain foreign investment funds.

The Tax Plans 2027 did not (yet) contain further guidance on the previously announced amendments to the definition of the Dutch fund for joint account (fonds voor gemene rekening or FGR).

We briefly summarise these developments below.

Refund procedure for Dutch investors investing through foreign investment funds

Comparable function

The Dutch dividend withholding tax exemption does not apply to dividend distributions made to a Dutch fiscal investment institution (fiscale beleggingsinstelling, FBI). The exemption is likewise unavailable for distributions made to a foreign investment fund that has a so-called ‘comparable function’ to a Dutch FBI.

A foreign investment fund is considered to have such a comparable function if it acts as an intermediary that manages assets of investors for collective investment purposes and is subject, in its country of residence, to a tax regime intended to ensure the tax-neutral collective investment of assets. This only becomes relevant if the foreign investment fund is (also) considered non-transparent for Dutch tax purposes, as it is otherwise disregarded for Dutch dividend withholding tax purposes.

Difference in treatment

Dutch FBIs may benefit from a remittance reduction regime. Broadly speaking, this regime allows certain Dutch and foreign withholding taxes borne by the Dutch FBI to be credited against the Dutch dividend withholding tax due when the Dutch FBI redistributes its income to its investors. 

Foreign investment funds, with a comparable function to a Dutch FBI do not have access to equivalent treatment. Consequently, Dutch-resident investors, including pension funds, may face a higher effective tax burden when investing in Dutch companies through a foreign investment fund rather than through a Dutch FBI. This is because those investors may not always be able to obtain relief for the foreign withholding taxes due when the foreign investment fund redistributes its income to its investors. For more details, please also refer to our earlier article on Supreme Court rulings regarding Dutch taxation of foreign investment funds.

New proposal

To address this difference in treatment, the Tax Plans 2027 introduces a new refund mechanism for Dutch residents, including pension funds, that indirectly receive Dutch-source dividends through a foreign investment fund. Subject to certain conditions, Dutch investors may claim a refund of Dutch dividend withholding tax borne at foreign investment fund level.

The amount of the refund will generally be determined using a statutory formula, although investors may alternatively demonstrate that they suffered a higher economic tax burden than would have arisen had the investment been held through a Dutch FBI to cover a potential EU vulnerability. These proposed changes have previously been explicitly supported by the Dutch pension federation (Pensioenfederatie).

FGR rules

As of 1 January 2025, the Netherlands introduced new rules for the tax classification of Dutch and foreign entities. Under the new classification rules, as a main rule, all Dutch and foreign partnerships have become transparent for Dutch tax purposes, unless they qualify as an FGR. For further information on the potential implications for pension funds, please refer to our earlier article on the Dutch tax classification reform: what pension funds need to know.

Since the new rules took effect, the definition of an FGR has given rise to several interpretative issues and uncertainties. A separate legislative proposal containing further amendments to the FGR definition is therefore expected.

The Dutch Ministry of Finance did not provide any further information on these amendments as part of the Tax Plans 2027. The legislative proposal is currently expected to be published in Q1 2027, with the amended rules expected to enter into effect on 1 January 2028.

Other developments

Another noteworthy development concerns the Dutch tax treatment of foreign pension funds. Under Dutch tax law, foreign pension funds may benefit from exemptions from Dutch corporate income tax and dividend withholding tax where they are considered sufficiently comparable to qualifying Dutch pension funds.

The Dutch government has announced its intention to modernise the existing policy guidance on the Dutch pension fund exemption, which is expected to be published before the end of 2026. The expectation is that the revised guidance will adopt a more practical and accommodating approach to the comparability assessment. Two recent Knowledge Group positions issued by the Dutch tax authorities already reflect this direction, as discussed in our article Further Dutch tax policy guidance on foreign pension funds.

Takeaway

Budget Day 2026 brought relatively few tax developments for pension funds. The most notable development is the proposed refund mechanism for Dutch investors that invest in Dutch shares through foreign investment funds.

No further details were announced regarding the proposed amendments to the FGR regime. Pension funds and other investors using Dutch or foreign investment vehicles should therefore continue to monitor developments in this area.

Contact us

If you have any questions or require assistance in assessing how these developments may affect your investments or fund structures, please contact your trusted adviser at Loyens & Loeff or one of the specialists listed below.