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The open limited partnership (open CV) is currently subject to corporation tax in the Netherlands. This is set to change with effect from 1 January 2022. The open CV will then become fiscally transparent.<\/p>\n
A limited partnership (CV) is a form of partnership in which there is at least one limited partner and one general partner. The limited partners are usually the investors. They are also referred to as silent partners. A limited partner (also known as a \u2018commandite\u2019) is liable for the CV\u2019s obligations only up to the amount of capital contributed by that limited partner.<\/p>\n
The limited partner must not interfere with legal acts relating to the limited partnership. This is the responsibility of the general partner. The general partner is jointly and severally liable for the debts of the limited partnership.<\/p>\n
A CV may be open or closed. An open CV is one to which anyone may join without the consent of all the partners being required. This is also referred to as the consent requirement.<\/p>\n
A general partnership is liable for corporation tax. This means that the partnership pays tax on its profits.
\nOne of the situations in which the open CV is used is the transfer of savings from (tax-inefficient) Box 3 to the (much more tax-efficient) corporation tax regime. In such cases, the open CV serves as an alternative to the savings private limited company.
\nAnother common use of the open CV relates to structures designed to anonymise the assets held within them.<\/p>\n
A private limited partnership (CV) is fiscally transparent. This means that the partnership itself does not pay tax on its profits; instead, those profits are allocated to the partners for tax purposes.<\/p>\n
Very often, the Dutch tax treatment of an open CV does not correspond to that in other countries. This so-called hybrid mismatch is undesirable. This is resolved by no longer treating the open CV as subject to corporation tax in the Netherlands.<\/p>\n
However, this does have significant implications for the Dutch tax payable by the partners. Just prior to the new rules coming into force, the assets of the CV are deemed to have been transferred to the partners. As a result, tax must be settled. The transitional arrangement offers four options for avoiding this settlement.<\/p>\n