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ARTICLE · 28 FEBRUARY 2020

Dutch CLO Vehicles Impacted By VAT Change

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The Dutch tax authority has notified various collateralised loan obligation issuing vehicles that it has changed its view that collateral management services and collateral administration services are exempt from Dutch VAT.

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Overview

The Dutch tax authority (Belastingdienst) has notified various collateralised loan obligation issuing vehicles (CLO SPVs) that it has changed its view that collateral management services and collateral administration services (CLO Services) are exempt from Dutch VAT.

This means that going forward the Dutch tax authority expects Dutch VAT to be charged on these services. This VAT represents an absolute cost to these structures as it cannot be recovered.

CLO SPVs, their collateral managers, their other service providers and investors urgently need to evaluate their position.

Background

CLO SPVs buy in CLO Services from collateral managers and collateral administrators (Service Providers) so that they are able to function. These are critical services for the management of their offering and typically represent the more significant expenses of these vehicles.  

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