Foreign real estate funds eligible for Dutch FBI tax exemption


On 23 November 2018, the Lower Court in Breda, the Netherlands, decided that a German Open-Ended Public Fund (represented by PwC) was entitled to the FBI regime providing, among others, for a 0% Corporate Income Tax (CIT) rate on Dutch source real estate income.

The Court also ruled that the portfolio investment test (one of the requirements of the Dutch FBI regime) should apply only to the Dutch real estate activities. The German fund held a large portfolio of Dutch real estate investments and was assessed with Dutch CIT on Dutch source real estate income in the years 1996-2010. The FBI regime is a facility in the Dutch CIT Act that can be applied by listed and non-listed (real estate) investment funds such as CIVs and REITs.

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