Strategic Considerations for International Investors in Dutch Real Estate

Volume 12 No 5    /    Read Article

By Anton Louwinger (Guest Authors)

From an economic viewpoint, the Netherlands is a highly attractive destination for international real estate investors, thanks to its robust legal framework, transparent property market, and strategic location within Europe. From a tax policy viewpoint, however, the Dutch tax environment can be challenging, as it is subject to frequent legislative changes. Recent updates – including the partial discontinuation of the Dutch equivalent of a R.E.I.T., known as the F.B.I. regime, revised entity classification standards, and stricter interest deduction rules – have significantly impacted the landscape for cross-border investors. In his article, Anton Louwinger, a partner in CMS Netherlands, Amsterdam, explains the important issues at various points in the ownership period, including (1) R.E.T.T. or V.A.T. on purchases, (2) C.I.T. during ownership, (3) caps on deductions for interest expense and application of anti-abuse rules for payments to a foreign related party, (4) withholding tax on interest and dividend payments, (5) caps on the use of N.O.L.’s, and (6) taxation of capital gains upon sales.  See more →