Qualification Rules 2025

As previously announced, there willbe changes to the Dutch entity qualification rules starting January 1, 2025. These updates extend their reach beyond Dutch entities to encompass non-Dutchentity forms as well. The primary objective of these amendments is to mitigate international mismatches, as also addressed with the principles outlined inthe ATADII legislation.

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These new rules may also have implications forinternational MIP structures.
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In summary, the revised rules involve thefollowing steps:

𝟏. 𝐂𝐨𝐦𝐩𝐚𝐫𝐢𝐬𝐨𝐧 𝐌𝐞𝐭𝐡𝐨𝐝 – If a non-Dutch entity resembles a Dutch entity in form, it will betreated similarly for tax purposes.
𝐄𝐱𝐚𝐦𝐩𝐥𝐞: UK Ltd is similar to a Dutch BV and should be considered opaque for Dutch taxpurposes. If no resemblance is found, proceed to step 2.

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𝟐𝐚. 𝐅𝐢𝐱𝐞𝐝𝐌𝐞𝐭𝐡𝐨𝐝 – Is the non-Dutch entity, which differs in form, based in the Netherlands? If yes, it will be treated as opaque.

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𝟐𝐛. 𝐒𝐲𝐦𝐦𝐞𝐭𝐫𝐢𝐜𝐚𝐥 𝐌𝐞𝐭𝐡𝐨𝐝 – If the non-Dutch entity is not based in the Netherlands, its qualification follows that of its home country.
𝐄𝐱𝐚𝐦𝐩𝐥𝐞: UK LLP, not similar to a Dutch entity, is typically transparent in the UK andthus treated as such for Dutch tax purposes.

Yesterday, the Dutch government released a draftdecree providing guidance on determining whether a non-Dutch entity form issimilar to one of its Dutch counterparts. Initial observations include:

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💡 The list isnotably shorter than the current classification list for non-Dutch entity forms.

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💡 Entitiescurrently qualifying as Dutch limited partnerships ("CV-achtige") are likely to be deemed similar to Dutch limited partnerships under the new decree.

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💡 Lux SCSshould be treated similarly to a Dutch limited partnership (transparent as of2025), with the same expectation for Lux SCSp.

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💡 The US Delaware LP should be considered similar to a Dutch limited partnership(transparent as of 2025).

Starting January 1, 2024, restructuring provisionshave been introduced to provide taxpayers with a one-year window to mitigateany potential Dutch tax implications resulting from the new qualificationrules. Timely action is recommended to avoid adverse tax consequences.

Do you have either Dutch limited partnerships(“CVs”) or non-Dutch holding or pooling entities in your Dutch structure? Feel free to reach out to us to discuss your situation.

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#Entityclassification #WFKR #LP #SCSp #MIPs #ATADII

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📝 Disclaimer: The above serves as general information and not professional tax advice.