Quoted: The new Dutch entity tax classification rules

The new Dutch entity tax classification rules – update

Publication

06-06-2025

5 minutes read

On 1 January 2025, the new Dutch tax classification framework entered into force. Dutch and foreign (limited) partnerships are now, as a main rule, classified as transparent for Dutch tax purposes, except when a (limited) partnership should be considered a fund for joint account (FGR). Also the tax classification rules applicable to FGRs were amended as from 1 January 2025 as well as those applicable to entities formed under foreign law.

Early 2025, a public consultation was launched to obtain input from the market on the issues and uncertainties on the new rules applicable to FGRs. In April 2025, a Q&A document addressing a number of practical questions was published by the Dutch Ministry of Finance. Subsequently, in June 2025, the Dutch State Secretary for Finance announced further investigation into the possibility of additional amendments to the FGR definition to take away certain issues and uncertainties. In anticipation of legislative proposals, new grandfathering rules were proposed in September 2025 (in additional to existing grandfathering rules) allowing limited partnerships to (temporarily) retain their tax transparent status until the new rules enter into effect.

This edition of Quoted is an update of our Quoted of June 2025. It gives an overview of the current (2025) Dutch entity classification rules and addresses the new insights and developments in relation thereto.