Netherlands: VAT exemption, investment funds | KPMG | GLOBAL
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Netherlands: VAT exemption for management of (real estate) investment funds

Netherlands: VAT exemption, investment funds

The Dutch Supreme Court rendered a judgment that seemingly limits the value added tax (VAT) exemption for the management of real estate companies.


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The Supreme Court concluded that the VAT exemption can only apply if (the manager of) an investment institution was actually granted a license as referred to in the (then applicable) Investment Institutions Supervision Act (Wet toezicht beleggingsinstellingen—WTB). The Supreme Court’s judgment follows on from a judgment of the Court of Justice of the European Union (CJEU). 

This case is: Fiscale Eenheid X (25 November 2016)


The taxpayer concluded management agreements with three companies that invest in real estate (“real estate funds”). The activities performed by the taxpayer include 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 VAT-exempt. As a further explanation of the exemption, the CJEU determined that funds are only to be regarded as special investment funds if they are subject to “specific State supervision” at the national level and that actual property management does not qualify as “management” within the meaning of the VAT exemption. 

Supreme Court’s judgment

The Supreme Court held that the supervision applying in 1996 by virtue of the WTB can be regarded as “specific State supervision”. However, if an investment institution falls under the WTB but is exempt from the requirement to hold a license and is not entered in the WTB register, then there is no “specific State supervision.” According to the Supreme Court, this means that the exemption for the management of special investment funds does not apply to the management of investment institutions exempted from the requirement to hold a license.

KPMG observation

The Supreme Court judgment appears to further curtail the VAT exemption in the Netherlands. It will be necessary to ascertain for all fund managers whether they are actually required to hold a license. If this is not the case, then the VAT charged on the management of funds that perform activities which are partly or fully VAT-exempt, will be an expense item.


Read a December 2016 report prepared by the KPMG member firm in the Netherlands: Supreme Court limits VAT exemption for the management of (real estate) investment funds

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