Expat Tax Guide for Americans Living in the Netherlands
- Living as an Expat in the Netherlands
- Netherlands at a Glance
- What are expat taxes like for Americans living in the Netherlands?
- Who Has to File Taxes in the Netherlands?
- Who Qualifies as a Tax Resident in the Netherlands?
- What Is the Income Tax Rate in the Netherlands?
- What Is the Deadline for Filing a Tax Return in the Netherlands?
- What Other Types of Taxation Does the Netherlands Have?
- Does the US Have a Tax Treaty with the Netherlands?
- Does the US Have a Totalization Agreement with the Netherlands?
- Navigating Tax Compliance for US Expats in the Netherlands
Living as an Expat in the Netherlands
The Netherlands is a popular destination for US expats, and there are good reasons for that. With its vibrant culture and tolerant social outlook, the Netherlands can seem like a dream home for Americans moving abroad. (Plus, almost everyone speaks English!)
But what are Dutch taxes like for expats? In this guide, we’ll go over what you need to know when planning to move to the Netherlands.
Netherlands at a Glance
- Primary Tax Form for Residents: Belastingaangifte.
- Tax Year: January 1–December 31
- Tax Deadline: May 1
- Currency: Euro (EUR)
- Population: 17,748,000
- Number of US Expats: Estimated 35,000
- Capital City: Amsterdam
- Primary Language: Dutch
- Tax Treaty: Yes
- Totalization Agreement: Yes
What are expat taxes like for Americans living in the Netherlands?
Before discussing US expat taxes in the Netherlands, it’s worth noting that Americans living overseas still have to file a US tax return. This is true regardless of where you live—from Atlanta to Amsterdam. You are also required to report your worldwide income, not just income that came from a US source.
In addition, as an American living in the Netherlands, you will probably also have to file a Dutch tax return. To learn more about what you can expect, let’s look closely at taxes for expats in the Netherlands.
Who Has to File Taxes in the Netherlands?
If you are considered a resident of the Netherlands, you must pay income tax. If your only source of income is from traditional employment in the Netherlands, you will not have to file a return. Your income taxes will be withheld at the source. If you have other forms of income, such as:
- Income from outside of the Netherlands
- Self-employment income
- Investment Income
…you will typically have to file a return to report it.
What about non-residents? If you are not considered a resident of the Netherlands, you will only be required to file and pay income taxes if you receive income from a Dutch source. This includes:
- Employment income from a Dutch employer
- Employment income earned while working in the Netherlands, regardless of whether the employer was foreign or Dutch.
- Income from real estate located in the Netherlands
- Income from substantial shares in a Dutch corporation
- Income from serving on the board of directors or supervisory board of a Dutch legal entity
Otherwise, you will generally not have to file a Dutch tax return as a non-resident.
Who Qualifies as a Tax Resident in the Netherlands?
The rules for residency in the Netherlands are not always clear-cut. To a certain degree, the Dutch government has room to interpret residency status on a case-by-case basis. However, you will generally be considered a resident if one or more of the following factors are true:
- Your primary home is located in the Netherlands
- Your family lives in the Netherlands
- You work primarily in the Netherlands
- You have a Dutch bank account
- You have a Dutch insurance policy
If you have no clear economic or social ties to the Netherlands, you will likely be considered a non-resident.
Learn where the best tax havens are, common traps, and ways to save money on your US expat taxes.
What Is the Income Tax Rate in the Netherlands?
The Netherlands has three categories of taxable income. These are known as “boxes.”
- Box 1 refers to income from employment, business profits, or home ownership
- Box 2 refers to income from substantial interest
- Box 3 refers to income from savings and investments
Box 1 is taxed at progressive rates. Below, you can see the Dutch income tax rates for 2022. (All amounts given are in euros.)
|Taxable Income (EUR)||2022 Income Tax Rate|
|0 – 35,472||9.42%|
|35,472 – 69,398||37.07%|
Box 2 income is taxed at a flat rate of 26.9%, and Box 3 income is taxed at a flat rate of 31%.
What Is the Deadline for Filing a Tax Return in the Netherlands?
Just like in the US, the Dutch tax year is the same as the calendar year—January 1 to December 31. The deadline for filing a tax return in the Netherlands is May 1 of the following year. There are filing extensions available, but only for taxpayers who are registered with a tax agent.
What Other Types of Taxation Does the Netherlands Have?
In addition to the income tax, the Netherlands imposes several other forms of taxation.
- The Netherlands levies a value-added tax (VAT) on certain goods and services. The standard VAT rate is 21%, though some goods are subject to a lower rate of 9%. Others are exempt from the VAT entirely.
- The Netherlands also imposes a gift and inheritance tax. This tax is based on the fair market value of the gift or inheritance given. The rate for this tax ranges from 10% to 40%, depending on the relationship between the donor and receiver.
- Certain products are subject to an excise tax. This includes alcohol, cigarettes, cigars, and mineral oils.
- Immovable property, such as real estate, is taxed at the municipal level. The rate for this depends on where the property is located.
- The sale of immovable property is taxed at a 2% rate, payable by the buyer.
- Residents are subject to a 21% insurance tax on their insurance premiums. (Several exemptions apply.)
- Individuals who own a vehicle may be required to pay a Dutch road tax. The rate for this tax is based on the weight of the vehicle and the type of fuel it uses.
- Corporate income is taxed in the Netherlands. The standard rate for the corporate income tax is a flat 25.8%.
Does the US Have a Tax Treaty with the Netherlands?
Yes. The US-Netherlands tax treaty defines which country an expat owes taxes to, reducing the risk of double taxation. Typically, you will pay taxes to whichever country you are considered a resident of. (Though, as a US citizen, you will still have to file a US tax return regardless of your residency status.)
Does the US Have a Totalization Agreement with the Netherlands?
Yes, American expats living in the Netherlands can take advantage of the totalization agreement between the US and the Netherlands, which helps to ensure that they are only obligated to contribute to one country’s social security system. This agreement protects expats from the burdensome issue of double taxation and ensures that they are not unfairly penalized for living and working abroad.
Under the agreement, expats may qualify for social security benefits from both countries based on their work history and contributions. This can provide a valuable safety net for individuals and families living and working in the Netherlands. Additionally, the agreement helps to streamline the process for expats to receive benefits and avoid potential bureaucratic hurdles.
Navigating Tax Compliance for US Expats in the Netherlands
Looking to better understand taxes for US citizens living in the Netherlands? This guide has you covered. But if you still have questions or find the process of filing your expat taxes overwhelming, don’t worry – we have the answers and can even prepare and file your taxes on your behalf. Let us help make your expat tax experience in the Netherlands stress-free.
Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.