On 15 December 2025, the Dutch Ministry of Finance has published the draft Act adjustment mutual fund for joint account (Wet aanpassing fonds voor gemene rekening, FGR Adjustment Act) for public consultation, which aims to revise the definition of the mutual fund for joint account (fonds voor gemene rekening, FGR) in the Dutch Corporate Income Tax Act 1969 (CITA) and introduce a so-called “opt-out” (afmeldregeling). The FGR Adjustment Act introduces significant changes to the legal and fiscal framework for the or mutual fund for the FGR. This proposal is a response to practical issues and legal uncertainties that have arisen following recent reforms in the Dutch tax qualification policy for legal forms, and specifically addresses concerns raised by the Dutch Parliament and stakeholders in the investment fund sector.

New definition of the FGR

The FGR Adjustment Act clarifies and modernizes the definition of an FGR. Funds should closely consider whether they meet this new definition. The new definition is as follows:

A FGR is a fund established to obtain benefits for its participants by investing or otherwise deploying funds for joint account, provided that:

  1. Regulatory qualification: The fund qualifies as an “alternative investment fund” (beleggingsinstelling) or “UCITS” (icbe) as defined in Article 1:1 of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht, AFS). This aligns the FGR definition with European regulatory concepts and ensures that only collective investment vehicles are covered.
  2. Transferable participation rights: The units in the fund must be transferable. Units are not considered transferable if they can only be redeemed by the fund itself (the so-called “redemption fund” (inkoopfonds)).
  3. No double taxation: The fund is not already subject to Dutch corporate income tax due to its legal form (e.g., as a public or private limited company), nor would it be if it earned Dutch-source income. This prevents overlap between the FGR regime and other forms of corporate tax liability.

The FGR is, by law, treated as a taxable entity (an “enterprise”) for Dutch corporate income tax purposes.

The new opt-out regime

Perhaps the most notable innovation is the introduction of an opt-out regime (afmeldregeling), allowing certain funds that would otherwise qualify as an (non-transparent) FGR to request not to be treated as such. The main features and requirements of this regime are:

  1. Maximum number of participants: The fund must not have more than 20 ultimate participants (natural persons or legal entities) to whom the assets, liabilities, income, and expenses are attributed. This is a continuous test, and the rule is designed to prevent circumvention by interposing transparent entities.
  2. Information requirement: The fund must provide the Dutch tax authorities with all information necessary for taxation at the participant level, both at the time of the opt-out request and upon any subsequent changes in the participant base. This includes names, addresses, and tax identification numbers.
  3. One-time election: The opt-out can only be exercised once per fund. If the fund later fails to meet the requirements (e.g., the number of participants exceeds 20 or information is not provided), it will be treated as an FGR from that moment, and the opt-out cannot be used again.

The request for the opt-out must be submitted:

  • For Dutch-resident funds: in the year the fund would first qualify as an FGR.
  • For non-resident funds with Dutch-source income: in the year the fund would first become subject to Dutch corporate income tax.
  • For other cases: in a year of the fund’s choosing.

The transitional regime

If your fund already qualified as an FGR prior to 31 December 2024, or will qualify as a (non-transparent) FGR under the current rules, it is important to consider whether the transitional regime can offer relief. The transitional regime is specifically designed to address the practical challenges faced by funds that became FGRs under the 2025 rules but may wish to revert to transparency under the new Act, which is expected to apply from 1 January 2027.

An amendment has been proposed to extend the transitional regime to all funds established on or after 1 January 2025, to avoid temporary tax mismatches and administrative burdens until the new FGR definition takes effect in 2027. It also removes irrelevant conditions for new funds, making the rules more practical and ensuring greater legal certainty for investors.

If the request under the transitional regime is granted, the fund is treated as “transparent” for Dutch tax purposes, meaning taxation occurs at the participant level rather than at the fund level. If the request is denied, the fund remains an FGR and is taxed accordingly.

The transitional regime has to be carefully considered, as this could prevent unintended tax consequences and administrative burdens during the transition to the new regime.