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Netherlands: VAT exemption, management of real estate investment funds

Netherlands: VAT exemption, real estate investment

The Advocate General of the Court of Justice of the European Union (CJEU) issued an opinion concluding that in assessing whether a fund is subject to “specific State supervision”—and thus qualifies as a special investment fund—attention must be paid to Dutch regulatory law. General administrative services and operational management services can be regarded as exempt from value added tax (VAT) of a special investment fund.


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The opinion was issued in: Fiscal Unity X (2 September 2016)


The taxpayer concluded management agreements with three companies that invested in real estate (“real estate funds”). The investors in these real estate funds were institutional investors. The activities performed by the taxpayer by virtue of the management agreements included the administration and management of the real estate funds, attracting investors, the purchase and sale of real estate, and property management.

The management of special investment funds is exempt from VAT. The Dutch Supreme Court referred the case to the CJEU to resolve whether real estate funds qualify as special investment funds, and whether the actual property management is covered by the term “management” within the meaning of the VAT exemption.

The CJEU in December 2015 found that funds are only to be regarded as special investment funds if national law provides for “specific State supervision” and that actual property management does not qualify as “management” within the meaning of the VAT exemption. Following the judgment from the CJEU, the Advocate General issued a further opinion, prior to a judgment issued by the Dutch Supreme Court in this case.

The Advocate General’s opinion addresses: (1) what are special investment funds; (2) what is meant by funds that are subject to “specific State supervision” under national law; and (3) the term “management.”


Read a September 2016 report prepared by the KPMG member firm in the Netherlands: Advocate General issues Opinion on VAT exemption for the management of (real estate) investment funds

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