Knowledge group of the Dutch tax authorities clarifies investment fund definition for mutual funds
Knowledge group of the Dutch tax authorities clarifies investment fund definition for mutual funds
On 30 July 2026, a knowledge group of the Dutch tax authorities published an opinion concerning two Scottish Private Fund Limited Partnerships operating as a co-investment fund and a carried interest fund within a wider investment fund structure. It opines regarding an element of the qualification of these partnerships under Dutch tax laws as either tax transparent or opaque.
Background
Starting 1 January 2025, the Netherlands has enacted new rules on the classification of foreign legal entities and mutual funds (fondsen voor gemene rekening) and furthermore that (limited) partnerships are in principle tax transparent because the concept of non-transparent limited partnership was abolished. Part of these new rules is a so called priority rule that it must first be determined whether the definition of a non-transparent mutual fund applies to any (foreign) mutual fund or (limited) partnership that qualifies as an investment fund. Such a mutual fund can then be either tax transparent or opaque depending on certain stipulations in the fund documentation regarding the redemption or sale of the participations in the mutual fund.
A non-transparent mutual fund (fonds voor gemene rekening) is defined as: a fund for obtaining benefits for the participants by investing or otherwise using funds for joint account, provided that this fund is qualified as an alternative investment fund (AIF) or undertaking for collective investment in transferable securities (UCITS) as referred to in article 1:1 of the Dutch Financial Supervision Act (FSA) and the participation in this fund is evidenced by transferable certificates of participation.
The FSA refers to the AIFM Directive (2011/61/EU) for the definition of an AIF: collective investment undertakings [..] which raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors [..].
Position of the Knowledge Group
The opinion of the knowledge group provides answers to two questions regarding the definition of a mutual fund in light of the definition of the AIFM Directive:
- Can a co-investment fund and a carried interest fund that both are part of a larger investment fund, be considered an AIF or UCITS; and
- Can a Scottish investment fund be considered an AIF?
Question 1
This question focuses on the question whether the co-investment fund and carried interest fund must have their own independently pre-defined investment policy.
According to the knowledge group, in the case at hand the co-investment fund and carried interest fund can be considered so called feeder funds as defined in article 4, paragraph 1, sub m. of the AIFM Directive. The funds in question were used to allow certain employees of the fund manager to participate in the results of the master fund. On this basis, the knowledge group concludes that this means that the co-investment and carried interest fund are a part of the investment policy of the larger fund. This means that they can qualify as an AIF or UCITS and therefore as a non-transparent mutual fund, provided the other requirements are met.
Question 2
To qualify as AIF or UCITS as defined in the FSA, the fund (or its manager) must provide proof that the constituent elements of the investment fund definition have been met. According to the Fund Decree 2025 (Stcrt. 2025, 40593), this can be done by providing the permit of the fund manager based on the Dutch FSA or its equivalent in another EU Member State. The Fund Decree 2025 does not elaborate on non-EU funds or regulatory frameworks.
Against this background, the knowledge group also considered whether a Scottish limited partnership may qualify as an AIF or UCITS for these purposes. According to the knowledge group, the relevant Scottish financial supervision rules were implemented based on the AIFM Directive and UCITS Directive when the United Kingdom was still part of the European Union. After Brexit, these rules were maintained. Furthermore, the knowledge group considers that the UK Financial Conduct Authority has a comparable oversight role to its Dutch equivalent (the Autoriteit Financiële Markten).
On this basis, the knowledge group concludes that it is reasonable to conclude that a fund resident in Scotland, with a fund manager that possesses a license provided by the FCA, can be considered an AIF or UCITS.
Londen & Van Holland Comments
The question whether or not a limited partnership qualifies as a non-transparent mutual fund for Dutch tax purposes has significant consequences for the tax structuring of the investments. If it qualifies as a non-transparent mutual fund, it may be subject to Dutch taxation (such as Dutch dividend tax or Dutch corporate income tax, depending on the specific structure). Also, if it is simultaneously considered transparent from the perspective of another jurisdiction, this may result in the hybrid entity anti abuse rules becoming applicable.
This knowledge group opinion provides clarification that co-investment or carried interest vehicles which (generally) do not have their own predefined investment policy, may still meet this part of the Dutch definition of alternative investment fund, provided they are part of a larger investment structure.
Furthermore, the knowledge group opinion confirms that the financial supervision laws of the UK are sufficiently comparable to the EU financial supervision laws. This is a welcome clarification given the importance of the UK for investment funds and investment managers and Dutch investments. Unfortunately, the opinion does not provide clear guidelines on how to determine how it came to the conclusion that these rules are comparable. Given the fact that the United Kingdom was a member of the European Union when the financial supervision framework was implemented, this seems not to be necessary. However, this means that further guidance from the knowledge group should be awaited for the determining the comparability of the financial supervision laws of other non-EU countries.
If you have any questions regarding this knowledge group opinion and its potential impact, please contact Roland Meuwissen at r.meuwissen@londenholland.nl / +31 6 27 53 32 89 or your usual contact at Londen & Van Holland.