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Dutch taxes on foreign (US) accounts

Question:
 
I am a US citizen and have been living in the Netherlands for the past 2 years. I work here and pay taxes in both countries on my income (no 30% rule). I have some accounts in the US that do not generate any income/revenue (pension account, brokerage account...). Do I have to pay taxes in the Netherlands for these US accounts even if I do not make me any money or do I just need to report them?
 
Answer:
 
Since you are living in the Netherlands you will have to declare your world wide income and world wide savings and investments in the Dutch tax return. The value of the savings and investments will have to be declared, the actual income from these savings and investments is irrelevant. This was decided to prevent that taxable interest or dividend would be changed to tax free increase of the value of the savings and investments. The fact that you do not receive income out of your US savings therefore doesn‘t mean that you don‘t have to declare these savings in your Dutch tax return. A result of declaring the US savings and investments is that you (may) pay tax on them in the Netherlands based on a fictitious income of 4% over the value of the assets against a tax rate of 30%. Total savings and investments are exempted from taxation up to an amount of around € 20,000 (changes every year). Everything above this amount will be taxed.

If you do receive income which is also taxed in the US, you can claim a foreign tax credit for the tax you have already paid in the Netherlands. For more info see https://www.expatax.nl/taxnewsusa.php.


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Comments (7)
Comment by steve on Tue, Jun 4th, 2013 at 7:25 PM
does this apply to 401k and ira accounts? these are tax deferred savings plans in america. i heard they are exempt from tax until payments are made...then they are taxed in box 1 with balances over the allowed amount taxed in box 3. is this correct?
Comment by sr on Mon, Mar 10th, 2014 at 4:18 PM
this response indicates that the pension assets should be reported. aren?t all db and dc assets exempt from box 3?
Comment by arjan enneman on Tue, Mar 11th, 2014 at 11:59 PM
@sr the intention of the article was to discuss the consequences for bank accounts and real investments, not pensions. but to include them now: a real pension is exempted from taxation in box 3, like a 401(k). but a (roth) ira account is taxable in box 3.
Comment by sr on Wed, Jun 8th, 2016 at 4:33 PM
How would the Dutch tax office find out that i have a (roth)ira in the US?
Comment by Georginamg on Thu, Aug 11th, 2016 at 3:52 PM
I have a bank account with savings and a flat in the US. I have been living and working and paying taxes over my wage in NL since June 2014 but I have not declared it in my tax claims of 2015 and 2016 because I did not quite know what had to be declared and whether I would go back home. Can I correct my past tax claims and pay over the undeclared savings and/or property of the 2 years I have been living here ? What penalties will I get? Thanks!
Comment by Arjan Enneman on Wed, Aug 17th, 2016 at 2:32 PM
The Dutch tax authorities may get their information from different sources, for example from the IRS.
Comment by Arjan Enneman on Mon, Sep 12th, 2016 at 7:30 PM
@Georginamg: Taxation of the flat is divided to the US. So you won‘t have to pay anything for the flat in your Dutch tax return. Your foreign accounts will have to be declared in your Dutch tax return though, unless you have the 30% ruling. If you have the 30% ruling taxation of the accounts is also divided to the US only. If you don‘t have the 30% ruling a tax free amount is applicable. It depends on the height of your savings whether you will have to pay tax. See www.expatax.nl/box-3. The possible fine can be high. If you declare the savings yourself the fine can be 120%, otherwise it will go up to 300%. Also interest will be charged. Expatax can help with the adjustment of your tax return.
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