The Ministry of Finance has launched a public consultation on draft amendments to the mutual fund regime for funds for mutual account (FGR), proposing a refined legal definition, stricter qualification criteria, and a new opt-out mechanism for funds with fewer than 20 participants. The consultation runs until 2 February 2025.
The Dutch Ministry of Finance initiated a public consultation on 15 December 2025 regarding draft legislation addressing practical issues arising from the 1 January 2025 changes to the mutual fund regime for the funds for mutual account (fonds voor gemene rekening or FGR).
The consultation outlines proposed legislative amendments to the Dutch Corporate Income Tax Act 1969 regarding the classification of funds for mutual account (FGR). The primary goal of these changes is to refine the legal definition of such funds by requiring them to qualify as regulated investment institutions or hold transferable participation units.
Furthermore, the proposal introduces an opt-out mechanism that allows certain funds to avoid being treated as taxable entities if they have fewer than 20 participants.
The key proposed changes include:
Revised definition of FGR
Under the proposed amendment, a mutual fund is defined as a fund intended to provide benefits to its participants by investing or otherwise using funds in a common account. To be classified as an FGR for tax purposes, the fund must meet specific cumulative criteria:
- Regulatory status: The fund must be classified as an investment institution or an undertaking for collective investment in transferable securities (UCITS/icbe), as defined in the Financial Supervision Act.
- Transferability: Participation must be evidenced by negotiable certificates. However, these are not negotiable if they can only be returned to the fund.
- Tax liability: The fund must not already be subject to tax under other specific provisions of the Corporate Income Tax Act 1969.
The opt-out provision
A key element of the proposal is the introduction of Article 2a, which allows certain funds to request an exemption from classification as a mutual fund, thereby opting out of the FGR tax regime.
This option is subject to strict conditions:
- 20-person limit: The fund’s assets, liabilities, and income must not be attributable to more than twenty entities or natural persons, with temporary increases due to inheritance permitted.
- Information disclosure: The fund must provide specific data and information to the tax authorities as required by ministerial regulations.
- One-time use: The opt-out provision may be exercised only once and cannot be applied to the fund previously.
The consultation is set to conclude on 2 February 2025.
