No more RETT benefit in share deals

The Dutch government is planning the abolition of the concurrence exemption in the Real Estate Transfer Tax for share deals.

The Dutch government intends to abolish the concurrence exemption in the (Dutch)Real Estate Transfer Tax (“RETT”) for share deals with the aim of preventing tax avoidance. Generally, when newly build Dutch real estate is delivered, VAT is due and the concurrence exemption for RETT applies. When acquiring shares in a legal entity, no VAT is due on the acquisition. With the current application of the concurrence exemption, RETT is not due either because a share deal should be treated the same as an asset deal. As a result, the transfer of shares in a legal entity that owns newly build real property is not subject to VAT and RETT. This outcome is now considered undesirable by the Dutch government, and it is proposed to exclude the concurrence exemption from 1 January 2024 for share transactions.

Key takeaway

Given the circumstances, it could now be more beneficial to transfer real property using an asset deal instead of a share deal, for more information, please contact your trusted adviser

Reference: Voorjaarsnota 2023