8 questions about filing taxes as a US citizen in the Netherlands

Taxes are often a very intimidating topic. Tax systems can be complex, not very transparent, and making a mistake can be both expensive and land you in legal trouble. The complexity gets kicked up a notch if you’re starting a new life in a new country, and you have to learn everything from scratch!

As a US citizen living abroad, you’ll most likely need to do tax reporting both in your new country, and in the US. 

To bring a bit of clarity to the whole process, we’ve chatted with Christie from BNC tax. Her team of experts focuses on personal and business tax preparation, as well as FINCEN reporting. So if you’re an US citizen planning to move to the Netherlands, dive into Christie’s insider scoop below. 

“The tax code is written by a bunch of suits in Washington. The last people they consider are the American expats just trying to live and work abroad. Many rules can feel contradictory. It is easy to make mistakes and the penalties are harsh. People get overwhelmed and they don’t know where to find the correct information. Something that would have been very simple to report back home becomes complex very easily while working abroad.”

“Married couples are married so in sense, yes. But for US tax purposes, only the US citizen spouse has a requirement to report their worldwide income. The non-US spouse does not. But the US spouse can “inherit” the complexities of their spouse! For example, a Dutch BV (Limited Liability Company) owed by a non-US spouse can be considered “owned” by the US spouse under US tax law.”

“There are deductions for foreign housing expenses. These vary depending on the cost of living in the location.”

“While many (most) of the Americans I work with actually move to the Netherlands for the change in lifestyle more than just the work opportunity, I do think it will stop some from moving. Americans tend to hold more investments than Dutch citizens and can be more likely to be hit with Box 3 tax on their assets. I always advise clients not to make a major life change like moving to a new country based on the tax rate alone! There is much to love about living in The Netherlands, and a good tax advisor can help predict the effective tax rate to help expats make it only one of the factors to consider when planning a move.“

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