A public benefit institution (algemeen nut beogende instelling) (“ANBI”) has tax advantages under Dutch tax law. To obtain and maintain its ANBI status, the institution may not hold more assets than are reasonably required for its activities and ANBIs must actually spend their financial means on public benefit purposes. This is called  the “spending requirement” (bestedingscriterium). On April 2, 2024, the Secretary of State of Finance published a policy resolution, including requirements  impact investments made by an ANBI should meet to comply with the spending requirement.

In practice, it was unclear if  investments contravened the spending requirement or not. The policy resolution now gives clear conditions and guidelines for investments to qualify as an impact investment (algemeen nut investering), which makes them automatically fall within the scope of the spending requirement. In the context of the policy resolution, an investment is to be understood as making available funds  (including loans) or goods, whether or not against the acquisition of shares or profit-sharing certificates, the (counter)value of which remains visible as an asset with the investing ANBI.

The following requirements should be met:

• The primary purpose of the investment must be the direct achievement or in furtherance thereof of one or more of the public benefit purposes of the ANBI, as included in its articles. The public benefit purposes of the ANBI should be sufficiently well-defined and also actually served (almost) in whole by the investment.
• The investment is not a business activity with the primary purpose of deriving a benefit.
• The investment amount must be spent (almost) entirely on activities or projects related to the objects of the investing ANBI.
• A board member of the ANBI or a person associated with such a board member (natural person or legal entity) may not in any way be involved in the organization in which the ANBI invests, for example, as incorporator, managing director, shareholder, other provider of capital, or employee.
• The ANBI must record the investment in its financial statements as an impact investment. Furthermore, the ANBI should include making impact investments in its policy plan or interim amendments thereto.

The policy resolution published by the Secretary of State of Finance entered into force on April 3, 2024. Investments made by ANBIs that do not meet the requirements as provided for by the policy resolution can be reported to the tax inspector within six months of the publication date. The tax inspector can set the institution a deadline within which the requirements can still be met. If an investment at any moment no longer meets the requirements to qualify as an impact investment, the tax inspector can set a reasonable time limit within which the investment can be adjusted to comply with the requirements or otherwise bring the assets in line with the spending requirements. Should this require a disinvestment, an appropriate disinvestment moment may be taken into account. The reasonable period will be determined in consultation with the ANBI, taking into account the relevant (individual) facts and circumstances.

For investments that do not qualify as impact investments according to the policy resolution, it has to be determined whether, in connection with the spending requirement, these assets are otherwise reasonably necessary for the continuity in light of the public benefit purpose(s) of the ANBI.

Q.G.M regularly assists its clients with obtaining and maintaining the ANBI status. Please feel free to reach out to one of our corporate lawyers if you have any questions regarding the ANBI status or the requirements an investment made by an ANBI should meet to qualify as an impact investment.