Dutch Budget Day: extra transitional rules for FGR proposed
As of 1 January 2025, the Dutch classification rules have changed. Many vehicles classify as transparent, with one important exception, the tax-opaque fund for mutual account (fonds voor gemene rekening; “FGR”). Reference is also made to our earlier Newsflashes (Newsflash, 3 October 2024, Newsflash, 29 April 2025 and Newsflash, 13 June 2025).
Introduced in 2024, a transitional measure allows funds until 1 January 2026 to implement a redemption-only mechanism (inkoopvariant) in order to remain tax-transparent, provided the intention to adopt that mechanism is documented before 1 January 2025.
Because practical issues persisted with the 2025 FGR definition, the Dutch Ministry of Finance is reconsidering the FGR definition.
On Budget Day (16 September 2025), the Dutch government proposed additional transitional measures to avoid an undesired classification as a tax-opaque FGR for only a few years. Entities that were tax-transparent through 2024 may opt out of the FGR status (and therefore remain tax-transparent) with effect from 1 January 2025 by not registering as an FGR with the Dutch Tax Administration and by not filing a 2025 corporate income tax return as an FGR, provided documented participant approval is obtained by 28 February 2026. No explicit participant approval is required if the fund had already recorded in 2024 its intention to implement a redemption-only mechanism.
The Dutch Ministry of Finance is exploring further refinements to the FGR definition, with the earliest possible entry into force on 1 January 2027, and anticipates that fewer entities would fall within the tax-opaque FGR category under any revised definition. To bridge the interim period, the new transitional regime is intended to run until 1 January 2027, or 1 January 2028, depending on when the new definition takes effect.
This measure operates alongside the 2024 transitional measure (the redemption-only mechanism). Funds that cannot implement the redemption-only mechanism by 1 January 2026 may instead rely on the new “do-not-register” route.
What to do now (at a glance)
- Assess whether you can and prefer to rely on the additional transitional measures to safeguard tax-transparency until the new FGR definition is introduced.
- If the additional transitional measures should be invoked, participant approval should be obtained before 28 February 2026, unless the intention to implement a redemption-only mechanism was recorded in 2024.
- Monitor the Dutch government’s work towards the new FGR definition is introduced as of 2027 or 2028.
We are in close contact with the Dutch tax authorities to discuss detailed aspects of the transitional rules. We are happy to assist on these action points, especially analysing whether these additional transitional rules can be applied in your structure and assist on the implementation.
