Doing Business in the Netherlands 2012 - American Chamber of ...

The company becomes a regular corporate taxpayer as from the
beginning of that financial year. The reinvestment reserve and the
rounding-off reserve must be included in the taxable income of that
year.
Upon request, an FBI may be converted into another Dutch
investment vehicle (see section 13.15 Exempt Investment Funds
(VBI)). In that case, the fiscal reserves and/or goodwill of the FBI
will be taxable before the conversion. After the conversion, the
investment vehicle is still obliged to distribute the net investment
income of the preceding year. According to the Ministry of Finance,
the converted fund can still benefit from Netherlands tax treaties
during the first eight months after the conversion.
18.15 Exempt Investment Fund (VBI)
The main advantage of the FBI is that the proceeds from the
investments are not subject to corporate income tax. However, the
profits (excluding capital gains) realized by the FBI must be
distributed to the participants annually and, consequently, become
subject to 15% Dutch dividend withholding tax. In order to create a
more favorable regime (i.e., no mandatory distribution of dividends,
no dividend withholding taxation in the Netherlands), a second
investment vehicle (Vrijgestelde Beleggingsinstelling, herein referred
to as “VBI”) has been introduced as of 1 August 2007.
Any taxpayer in the Netherlands that is subject to corporate income
tax may opt for the application of this VBI regime, provided that the
following requirements are met:
� The VBI is set up as a NV, Fund for Joint Account, or any
other Dutch resident entity established under the laws of the
Netherlands Antilles, an EU Member State or any other state
in case a Double Tax Treaty has been concluded with that
other state which contains a non-discrimination provision,
provided that the legal form of these foreign entities is
comparable to a NV, a BV, or Fund for Joint Account.
196 Baker & McKenzie