TaX
Î
Direct acquisition of property, RETT
(overdrachtsbelasting) and VAT (BTW)
•
The acquisition of property (including the acquisition of limited
real rights and economic ownership) gives rise to real estate
transaction tax (RETT), subject to certain exceptions being
applicable. RETT is levied from the purchaser and assessed
on the purchase price or the market value of the property,
whichever is higher. RETT is, levied at the rate of 6% (or 2%
in case of residential property). Under certain conditions
previous paid RETT may be deducted from the RETT due upon
the acquisition of the relevant property. RETT due must be
transferred into the bank account of the civil-law notary who is
instructed to execute the Deed of Transfer prior to the execu-
tion of the Deed of Transfer.
•
VAT is levied if the property concerns land which can be
considered a building plot for VAT purposes or if it concerns
property which, in short, is under construction or newly
developed (and certain other conditions have been met). VAT
is then due by operation of law and at a rate of 21%. Provided
certain conditions are met the purchaser should be able to rely
on an exemption for RETT. If VAT is not due by operation of law
parties may be able to opt for a VAT-able transaction (interac-
tion with RETT should be considered).
Î
acquisition of shares in a real estate company
•
If the acquirer (together with certain related parties) has or
will obtain a substantial interest in a real estate company, the
transfer of shares in such real estate company may also be
subject to RETT. One is deemed to hold or obtain a substantial
interest if (i) in case of a legal entity, one holds or acquires an
interest of 1/3 or more in the real estate company; or (ii) in
case of an individual, one holds or acquires an interest of more
than 7% in the real estate company. A legal entity of which
the assets mainly consist of property, and of which property at
least 30% is located in the Netherlands may (subject to certain
other conditions being met) constitute a real estate company
for RETT purposes.
Î
acquisition of economic ownership
(partnership interest)
•
The acquisition of economic ownership of property is also
subject to RETT. The acquisition of an interest in eg. a limited
partnership or other entity may be deemed to constitute the
acquisition of economic ownership of property and may be
taxed as such. An exemption may apply in respect of the acqui-
sition of an interest in a real estate investment fund or mutual
fund as defined in the Act on Financial Supervision (
Wet Finan-
cieel toezicht
): i.e. if the acquirer does not already hold and will
not obtain a substantial interest in that fund the acquisition of
an economic interest should not be subject to RETT.
Î
asset deal vs. share deal
•
Acquisition of the shares in a real estate company may gene-
rate tax savings in terms of RETT but it may also have other
tax consequences (e.g. CIT, VAT, tax liability should be conside-
red) which should be considered.
Investor Guide to Europe 2014 | 67
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