• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 10/2/2013

Netherlands - Proposal to allow ancillary activities for real estate 

October 2:  Legislation in the Netherlands would expand the definition of “passive investment” by a fiscal investment institution to allow shareholdings in a subsidiary whose purpose and actual activities consist of performing ancillary activities directly related to the real estate investments made by the fiscal investment institution.


In the Netherlands, fiscal investment institutions are subject to a 0% rate of corporate income tax, provided certain conditions are satisfied—one being that the fiscal investment institution only performs passive investment activities.

Accordingly, fiscal investment institutions performing real estate leasing activities are prohibited from performing any ancillary activities related to that real estate because such activities do not qualify as passive investment.

Holding 100% of the shares in a subsidiary that engages in business activities also does not qualify as passive investment.

Proposed legislation

Under the proposal, ancillary activities could be performed for an entity affiliated with the fiscal investment institution (parent company, subsidiary or sister company). If performed for the parent company, then the parent company would also have to be a fiscal investment institution.

The bill also provides examples of ancillary activities that relate to general and technical activities provided to lessees such as clearing, catering, reception, and conference services.

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