Impact of the backdated VAT change for Dutch-based CLOs





Europe’s market for collateralized loan obligations experienced a revision to an existing Dutch ruling. The revision will affect certain vehicles with a value-added tax and will (negatively) impact equity returns.

In February 2020, various directors of CLO special purpose vehicles domiciled in the Netherlands have been informed by the Dutch tax authorities that an annual 21% tax will be applied to the vehicle’s management fee. A decision that is highly likely to be appealed by Dutch law firm Baker & McKenzie Amsterdam N.V.

This 21% VAT applies to all outstanding Dutch SPV CLOs and warehouses and is back dated to 1 April 2019 and the backdated VAT bills could be as much as €300-400k and similar amounts per annum on ongoing basis.

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