The Dutch State Secretary for Finance has released an updated Fund Decree (2 December 2025), offering new guidance on how Dutch tax law treats investment funds, particularly those organized as Dutch or foreign limited partnerships. This clarification comes on the heels of the substantial classification changes introduced earlier in the year, making the Decree an important interpretive tool for anyone structuring or advising investment vehicles in or through the Netherlands. 

1. Regulatory Status Now Drives FGR Classification 

One of the most notable shifts is the move toward a more regulatory-focused test for determining whether an entity qualifies as a fonds voor gemene rekening (FGR). Instead of emphasizing internal transfer restrictions, the Dutch tax authorities now look primarily at whether the vehicle qualifies as an investment fund or UCITS under the Wft (Wet op het financieel toezicht - Dutch Financial Supervision Act) and whether it is registered with the AFM (Autoriteit Financiële Markten - Dutch Authority for the Financial Markets). Registration can be based on a full license or an exemption, and EU-based funds may rely on equivalent authorization in another Member State. 

This brings tax classification much closer to the financial supervision framework. However, the Decree remains silent on how funds outside the EU should demonstrate comparable status, which means that additional caution is required for global structures. 

2. Family-Exclusive Vehicles Are Not Eligible for FGR Status 

The Decree confirms that funds raising capital solely from a pre-existing group of family members fall outside the Wft. As a direct result, these funds cannot be treated as FGRs for tax purposes. This exclusion means that most family-only arrangements will continue to be treated as transparent, and their income will flow directly to the investors rather than being taxed at the fund level. 

3. A More Nuanced View of What Counts as “Normal” Portfolio Management 

Determining whether a fund remains within the boundaries of passive investment activity is often a delicate exercise. The updated Decree provides welcome guidance in two significant areas: investments in operating CVs and lending strategies. 

Investing in a CV that runs its own business does not automatically mean the investor (the fund) is viewed as performing entrepreneurial activities. The tax treatment hinges on the nature of the fund’s own involvement rather than the underlying partnership’s operational profile. 

Lending strategies receive even more detailed attention. The Decree introduces a safe harbor indicating when lending is considered a typical investment activity. It outlines various parameters relating to diversification, the proportion of lower-rated assets, leverage levels, and fee structures. While the framework creates clearer markers, the reality is that many private credit funds will operate outside the safe harbor, making bespoke analysis essential. 

4. Transferability of Participation Rights Remains a Core Element 

To fall within the FGR regime, participation rights must be transferable to parties other than the fund itself. If investors can only redeem their interest directly with the fund, the vehicle shifts into the category of a Redemption Fund, which is incompatible with FGR status. 

The Decree also makes room for practical realities by clarifying that transfers arising from universal succession, inheritance, or division of marital property do not undermine transferability. This prevents incidental or legally required transfers from disqualifying a fund. In more layered fund structures, each entity must be assessed independently, which may result in mixed classifications across the structure.

5. Reverse Hybrid Considerations Still Apply 

Even when a fund does not qualify as an FGR, it may still fall within the Dutch reverse hybrid rules. This can occur when related investors in jurisdictions that treat the entity as non-transparent collectively hold at least half of the interests. This aspect remains relevant for multinational fund arrangements where tax treatment varies across jurisdictions. 

Looking Forward 

Although the revised Fund Decree brings helpful clarity, it is not the final word on Dutch fund taxation. Further legislative changes are expected, with consultations planned before the end of 2025 and potential new measures taking effect in 2027 at the earliest. Transitional relief is available during this interim period, but advisors should nonetheless revisit existing structures to ensure continued compliance under the updated guidance.