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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 (9)
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.
Comment by rig them on Wed, Feb 1st, 2017 at 7:10 PM
Hello Arjan, I just came across to this discussion and I am interested as well to know the conditions since I am planning to work in the Netherlands. To me, to tax my capital that I have made in US 20 years ago, is not understood. I understand this is a Dutch law, but someone with a permanent residence in US that lives and works in the Netherlands, with his financial interests being solely in US savings, is obliged to pay 1.2% of its capital every year to the Dutch state? So my capital in 5 years will be reduced by 6% because I live in the Netherlands? And IRS has really agreed that Dutch authorities can have control over the investments of US citizens in US? Maybe "naive" questions but it sounds so strange. Thank you
Comment by Arjan Enneman on Tue, Sep 19th, 2017 at 1:13 PM
Unlike the US the Netherlands taxes income based on actual place of living. If you live in the Netherlands then you will have to pay tax on your world wide income unless an exemption can be claimed for a specific source of income based on an applicable tax treaty. With the US is agreed that the Netherlands can tax US accounts if the account holder is living in the Netherlands. The US will then offer a tax credit to prevent double taxation. This is common practice internationally. If your accounts earn (enough) interest or dividends or capital gain, then your accounts will not only be reduced by 1.2%. In the Netherlands not the real income from the accounts is taxed but a fixed percentage since there were many ways to prevent income.
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