Updated Dutch Fund Decree: FAQs for Investment Funds and Partnerships

The Dutch tax landscape for investment funds has undergone a significant transformation recently. The revised Fund Decree, issued by the State Secretary for Finance on 2 December 2025, provides essential guidance on the tax classification of Dutch and foreign limited partnerships, specifically clarifying the criteria for qualifying as a fund for joint account (FGR).

In light of these updates, we have prepared a set of Frequently Asked Questions (FAQs) to clarify their implications and guide you through the latest updates.

Updated Dutch Fund Decree: FAQs for Investment Funds and Partnerships

1. What is the main change regarding partnership classification?

Effective 1 January 2025, all Dutch and non-Dutch partnerships are classified as tax-transparent for Dutch tax purposes. This means the partnership itself is no longer taxed as a separate entity. Instead, all income, gains, and assets are attributed directly to the individual partners and taxed at their level. A notable exception applies to partnerships that meet the definition of a Fund for Joint Account (FGR), which are treated as non-transparent and therefore taxable.

2. Why was the Fund Decree updated in December 2025?

The update was issued to provide certainty about the amended FGR definition. With many limited partnership funds unintentionally reclassified, the updated decree offers more comprehensive guidance on when a fund is considered non-transparent.

3. What’s new in the updated Fund Decree and who is affected?

The updated Fund Decree introduces several new items.

Investment fund qualification: An investment fund qualifies as an FGR if it is recognised as an investment fund (AIF) or a fund for collective investment in transferable securities (UCITS) under the Dutch Financial Supervision Act (Wft).

Normal portfolio management strategy: A fund must follow a strategy that qualifies as normal portfolio management and not an entrepreneurial or value-add approach.

Tradability of participation rights: A fund’s participation rights must generally be tradeable. The decree provides clarifications for so-called redemption funds, specifying that certain transfers are excluded when determining a fund’s qualification.

The updated Fund Decree affects any investor or manager utilising Dutch CVs or foreign partnerships. Under the new rules, a non-Dutch entity, such as a US LP or UK LLP, is classified based on its similarity to Dutch legal forms or, where no equivalent exists, by following the tax treatment of its home jurisdiction.

4. Which funds are now explicitly excluded from being an FGR?

The decree clarifies that family-only funds, such as family offices or private wealth structures, do not qualify as FGRs because they are not covered by the Dutch Financial Supervision Act (Wft).

5. How can an entity be classified as an FGR?

An entity must qualify as an investment fund to be classified as an FGR. The updated decree clarifies that registration with the AFM (Dutch Authority for the Financial Markets) or an equivalent EU financial supervisory authority can be used to demonstrate this qualification.

6. What more can we expect about the new Fund Decree?

While the decree provides clarity, the Dutch government is still exploring additional legislative measures, particularly a refinement of the FGR definition. A legislative proposal was published for public consultation on 15 December 2025, with changes expected to take effect in January 2027.

How can we help?

The landscape of tax and regulatory classifications for funds is becoming increasingly complex. If you manage a Dutch CV or a foreign limited partnership, it is crucial to carefully evaluate your status under the new framework.