![]() ![]() This tax is due over the purchase price or the higher fair market value of the real estate. The acquisition of the legal title to, or the economic ownership of a real estate or rights related to real estate located in the Netherlands, for commercial purposes, is subject to 8% RETT. In short, the acquisition of solely the legal ownership of at least one-third in a real property entity is also considered to be a RETT taxable event. According to the state secretary, the definition of a RETT taxable transfer is met when the acquisition of shares in a real property company leads to the acquisition of the ownership of the real property company irrespective of whether economic ownership is obtained. The Dutch State Secretary of Finance lodged an appeal and took the positions that the Court of Appeal wrongly interpreted the definition of interest in a real property entity. In favour of the management company, the Court of Appeal ruled that due to the restrictions in ownership rights over the shares and the fact that no economic rights are acquired, the management company did not acquire an ‘interest’ in a real property entity which is a condition to levy RETT. In the subsequent cases at the district court and the Court of Appeal, the question arose whether the acquisition of sole legal title of shares in a real property entity holding Dutch property should be considered as the acquisition of an ‘interest’ in a real property entity subject to RETT even if the acquirer is not entitled to the profits deriving from such shares. Typically, these funds appoint a management company to manage the fund and to hold legal title of the underlying assets. The German fund was a so-called Sondervermogen which has no legal personality and invests for the risk and account of its investors. In 2015, a management company responsible for the management of a German fund acquired legal title of shares in various real property entities holding Dutch property. ![]()
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