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Important announcement regarding REIT regime
In the accompanying letter to the Budget Plan 2023, the Dutch government announced that as per 1 January 2024, REITs (FBI’s - fiscale beleggingsinstellingen) will no longer be allowed to invest directly in real estate. The consequence hereof is that profits derived by REITs from Dutch real estate investments will regularly become subject to Dutch corporate income tax as per 1 January 2024.
Under the current rules, a REIT is not subject to corporate income tax, but the mandatory annual distribution is subject to 15% Dutch dividend withholding tax. As not in all situations Dutch taxation can effectively be levied, the Dutch government now announced to introduce the rule that the REIT regime can no longer be applied by entities that invest directly in real estate, per 1 January 2024. No distinction will be made between Dutch real estate and non-Dutch real estate.
The Dutch government acknowledges that, in anticipation of these new rules, (non-listed) REITs may want to restructure their investments. The Dutch government mentions that RETT is in such case an important attention point and that it will be analyzed whether additional measures are needed in 2023 in this respect.
Further to the above, the REIT regime as such will continue to exist, but it will effectively be abolished for direct real estate investments. The changes to the REIT regime will be included in the Budget Plan of next year.
Budget Day Proposals
Status of the proposals
The proposals still need to be adopted by Dutch Parliament and thus may be subject to changes.
Legislation to come into effect as per 2023
In addition to the proposals noted above, a number of legislative proposals were already fully adopted and will come into effect automatically as per 2023. These are more related to personal dwellings.
