Netherlands Public-Private Partnership Tax Guide

PPS Contract Forms — DBFM and Concession

• DBFM — availability payment model: The DBFM model is the standard PPS form in the Netherlands. The SPV designs, builds, finances, and maintains the infrastructure asset. The public authority pays a beschikbaarheidsvergoeding (availability payment) to the SPV — the payment is made when the infrastructure is available for public use (the beschikbaarheid verplichting — the availability obligation). The payment is reduced if the infrastructure is not available (the output failure penalty — the outputspecifikatie). The DBFM contract typically runs for 20–30 years (the concessieperiode). The SPV is also responsible for maintenance (the onderhoudsverplichting) and lifecycle replacement (the vervangingsinvestering) over the contract period.
• DBFMO — including operations: The DBFMO model extends the DBFM by including the operation (exploitatie) of the infrastructure. The SPV is responsible for the day-to-day operation of the facility (e.g., running a prison, hospital, or school). The operation phase adds additional tax considerations: the SPV employs the operational staff (loonbelasting withholding), the SPV provides services to the public (btw treatment of the operational phase), and the SPV may have direct contracts with end users (the usage risk remains with the SPV).

VAT Grouping — Fiscale Eenheid BTW

• Btw group for construction phase: The PPS consortium (the SPV and its subcontractors — construction companies, maintenance companies) can form a fiscale eenheid BTW (VAT group) with the public authority. The VAT group allows: (a) the consortium to deduct input btw on construction costs (the SPV issues invoices to the public authority with 21% btw, and the public authority can deduct the input btw within the group), (b) no btw is charged on intra-group transactions (the construction consortium does not charge btw to the SPV), and (c) the public authority's input btw deduction is automatic within the group. Conditions for the VAT group: the members must be established in the Netherlands, the SPV must be financially, organisationally, and economically integrated with the public authority (the financies, organisatie, en economische verwevenheid criteria).

Corporate Tax — SPV Structure

• SPV — BV subject to Vpb: The SPV is a Dutch BV subject to corporate tax (Vpb) at the standard rate (21% up to €200,000, 25.8% above). The SPV's taxable profit is: the availability payment received from the public authority minus: (a) depreciation on the infrastructure asset (the SPV capitalises the construction cost and depreciates it over the contract period — the gebruiksduur — typically 20–30 years), (b) interest on the project debt (the SPV is highly leveraged — 70–90% debt-to-asset ratio), (c) maintenance and lifecycle costs, and (d) administrative and management costs. The SPV is required to file an annual corporate tax return and pay Vpb quarterly.
• Interest deduction — earnings-stripping rule: The PPS SPV's net interest expense is limited to 25% of EBITDA (the earnings-stripping rule under Article 15b Wet Vpb). Given the high leverage of a typical PPS SPV (70–90%), this limitation can significantly increase the effective tax rate. The de minimis threshold is €1 million — if the SPV's net interest expense is below €1 million, the limitation does not apply. Many PPS SPVs have interest expenses exceeding €1 million — the SPV must structure its debt to minimise the impact of the limitation (e.g., using exempt finance leases or optimising the interest rate and repayment schedule).

Asset Hand-Back and End of Concession

• Hand-back at nominal value: At the end of the DBFM contract, the infrastructure asset is transferred to the public authority (the teruggave van de infrastructuur). The hand-back is generally at nominal value (€1 or the residual book value) — the SPV sells the asset to the public authority at the contractually agreed hand-back value. The hand-back is outside the scope of btw (the overdracht van de infrastructuur at the end of the concession is a non-economic transfer — the public authority takes over the asset for public use). The hand-back may trigger a corporate tax event: the SPV may realise a capital gain or loss on the difference between the hand-back value and the net book value of the asset. If the hand-back value is €1 and the asset is fully depreciated (net book value = €0), there is no tax impact.

For the full VAT/btw group rules (the fiscale eenheid BTW and the btw-compensatiefonds — BCF), see our VAT/BTW Guide →. For the corporate tax rate and the earnings-stripping interest deduction limitation, see our Corporate Tax Guide →. For the construction industry rules (the bouw-VAT chain liability, the en-schedule for construction), see our Construction Industry Guide →. For the infrastructure sector specifics (the BGT — Basisregistratie Grootschalige Topografie — for land registration), see the Rijkswaterstaat PPS portal.