Dutch pension funds have reiterated their support for the European Commission’s Tax Omnibus proposal, but argued that its pension fund provisions should take effect by 2030 rather than being delayed until 2037.

In a new position paper, the Dutch Federation of Pension Funds (Pensioenfederatie), which represents €1.7trn in retirement savings on behalf of 10 million people, said the reforms would remove tax and administrative barriers that currently complicate cross-border investment.

The federation previously welcomed the Tax Omnibus and called on the Council of the EU and European Parliament to support the package, highlighting its potential contribution to the Savings and Investments Union.

The proposed amendments to the Parent-Subsidiary Directive would extend withholding tax exemptions on dividends and other profit distributions to pension institutions.

The proposal would also remove the current minimum participation threshold and repeal prior authorisation procedures used to verify exemption conditions at the time of payment.

Pensioenfederatie noted that pension funds currently faced a fragmented range of tax treatments when investing across the EU.

It argued that the proposed exemption would provide greater clarity, reduce administrative burdens and create a more level playing field across European capital markets.

It also welcomed planned amendments to the FASTER Directive, which would provide qualifying EU pension institutions with access to accelerated withholding tax relief procedures.

Pensioenfederatie suggested the reforms could improve net investment returns for pension funds while making it easier for European companies to access long-term growth capital.

However, it warned that the proposed start date of 1 January 2037 for the pension fund extension and related procedural changes was “too late”.

“Given the geopolitical challenges facing the EU, the urgent need to mobilise long-term capital, and the important role that pension funds can play in financing European growth and strategic priorities, this timing is too late,” the federation stated.

It therefore called on the European Commission and the Council to bring the measures into effect no later than 1 January 2030, aligning them with the FASTER Directive's application date.

The federation stressed that earlier implementation would help mobilise pension capital for priorities including European competitiveness, innovation, defence and the energy transition.

It added that aligning the dates would ensure the legal entitlement created by the Tax Omnibus translated into a practical withholding tax exemption for pension funds investing across EU borders.

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