It also provides clarification on the application of the FGR rules for (limited) partnerships that are established in the United Kingdom, by confirming under which circumstances these entities can be considered to qualify as an investment fund (beleggingsfonds) within the meaning of article 1:1 of the Dutch Financial Supervision Act (Wet op het financieel toezicht; FSA).

This guidance is particularly relevant for Dutch and foreign private equity, real estate, venture capital and other (alternative) investment fund structures.  

Background

As of 1 January 2025, Dutch and foreign (limited) partnerships are, as a general rule, treated as transparent for Dutch tax purposes. An exception applies where the (limited) partnership qualifies as an FGR, in which case a non-transparent classification prevails.

A Dutch or foreign (limited) partnership qualifies as an FGR if the following four cumulative conditions are met:

  1. The (limited) partnership should qualify as an ‘investment fund’ (beleggingsfonds) or ‘fund for collective investment in tradeable securities’ (fonds voor collectieve belegging in effecten) within the meaning article 1:1 of the FSA.
  2. It should invest for joint account (i.e., it should have more than one participant).
  3. Its activities should be limited to ‘normal’ portfolio management (i.e., generally not have a ‘value-add’ strategy).
  4. Its participations should be embodied by ‘tradeable participation certificates’, whereby the participation certificates are (only) not considered tradeable if they are only transferable to the investment fund itself by way of redemption.

Since the introduction of these rules, fund managers and investors have encountered practical uncertainties regarding their interpretation and application. In light thereof, the Dutch government has already announced its intention to further amend the FGR rules with effect from 1 January 2028. Reference is also made to our website post on the Dutch tax classification of (non-)Dutch limited partnerships – current state of play of 5 February 2026 and our Quoted publication on this topic for further background on the FGR rules and the current state of play.

The position now published by the DTA focuses on condition (1) above, which refers to the definitions of investment fund (beleggingsfonds) and fund for collective investment in tradable securities (fonds voor collectieve belegging in effecten). These definitions are derived from the Dutch implementation of respectively the EU Alternative Investment Fund Managers Directive (2011/61/EC; AIFMD) and the EU Undertakings for Collective Investment in Transferable Securities Directive (2009/65/EC; UCITSD). An investment fund (beleggingsfonds) is an AIF within the meaning of the AIFMD, without legal personality. A fund for collective investment in tradable securities (fonds voor collectieve belegging in effecten) is a UCITS within the meaning of UCITSD, without legal personality.

Although the published position specifically addresses the classification of a Scottish Private Fund Limited Partnership, its implications are broader as it provides guidance on how the relevant conclusions were reached by the DTA.

Team vehicles

Team co-investment and carried interest vehicles are widely used in investment fund structures, pooling partners/employees of the asset manager when investing/participating in the investment funds under management. Under the AIFMD and the Dutch implementation thereof in the FSA, such vehicles in principle qualify as an investment fund themselves, albeit typically exempt from supervision under the employee participation scheme exemption of article 2 sub 3 (f) AIFMD, as implemented in Dutch law.

In the relevant Dutch parliamentary guidance and a policy decree from the Dutch Ministry of Finance, it was already confirmed that investment funds – even if exempt from supervision – can satisfy condition (1) of the FGR requirements. However, whether the legislator had explicitly considered employee participation vehicles was not fully clear.

The position that was now published by the DTA confirms that co-investment and carried interest vehicles can meet condition (1), if such vehicle meets the requirements of an investment fund under the FSA.

Clarification on this point is helpful, as it eliminates uncertainty that has been existing since 2025. It also enables asset managers to review their team structures and see whether amendments are necessary. Under circumstances and particular tax regimes (e.g., for carried interest), the tax classification of the entity in which Dutch resident employees participate is key.

Foreign regulatory frameworks

Non-Dutch (limited) partnerships that are subject to equivalent local financial regulatory supervision as investment funds can also meet condition (1). As the FSA is the Dutch implementation of the AIFMD, (limited) partnerships established in other EU member states that qualify as AIFs are generally also considered to meet this condition. However, the application of this condition is less clear in relation to non-EU countries, which are not subject to the AIFMD framework.

The published position clarifies that the financial regulatory regime in the United Kingdom is considered comparable to the Dutch framework implementing AIFMD, as it was implemented when the United Kingdom was still an EU member state. Despite leaving the EU, the United Kingdom has largely retained the regulatory regime. Therefore, (limited) partnership investment funds that are managed by an asset manager that holds a license from the UK financial regulatory authority can meet condition (1) of the FGR requirements. 

Unfortunately, the published position does not provide any further clarification on the application of condition (1) in relation to (limited) partnerships established in other non-EU jurisdictions that are not subject to the AIFMD framework. As a result, the application of condition (1) in these situations remains a grey area.

Key takeaways

  • The DTA have confirmed that team co-investment and carried interest vehicles can meet condition (1) and therefore qualify as FGR, provided that all other FGR requirements are also met. This addresses an uncertainty that was present since 1 January 2025.
  • Dutch asset managers as well as foreign asset managers with Dutch resident team members should review their team structures and see whether amendments are necessary.

How we can help

The Dutch entity tax classification rules remain to be a moving target and further changes to the FGR definition are expected per 1 January 2028. Fund managers should therefore continue to carefully monitor these developments.

Loyens & Loeff has extensive experience advising fund sponsors, institutional investors and asset managers on the Dutch entity tax classification of investment structures, including private equity, real estate, venture capital and other alternative investment funds.

Because of condition (1), the regulatory aspects of a structure are also of importance when assessing the Dutch entity tax classification of (limited) partnerships. Our fully integrated team combines tax advisers, regulatory specialists and fund structuring lawyers, allowing us not only to analyse the Dutch tax and regulatory aspects of a structure, but also to assist with the practical implementation.

Contact us

If you would like to discuss the impact of these developments on your fund structure, please feel free to contact your trusted Loyens & Loeff adviser or one of the authors below.