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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 you’re planning a move to 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 to this, 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 take a closer look at taxes for expats 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:
…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:
Otherwise, you will generally not have to file a Dutch tax return as a non-resident.
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:
If you have no clear economic or social ties to the Netherlands, you will likely be considered a non-resident.
The Netherlands has three categories of taxable income. These are known as “boxes.”
Box 1 is taxed at progressive rates. Below, you can see the Dutch income tax rates for 2022. (All amounts given are in euros.)
Box 2 income is taxed at a flat rate of 26.9%, and Box 3 income is taxed at a flat rate of 31%.
Pro Tip: Certain foreign workers employed by a Dutch company can exclude 30% of their gross income from taxation for the first 10 years (120 months) of their employment. Consult a qualified expat tax professional to find out if you qualify.
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.
In addition to the income tax, the Netherlands imposes several other forms of taxation.
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.)
Pro Tip: The IRS also provides several tax benefits for Americans living abroad. This includes:
Using these tax benefits, most expats are able to erase their US tax bill entirely.
Yes. The US has entered into a totalization agreement with the Netherlands to establish rules for which country’s social security system an American expat would be obligated to contribute to. As with the US-Netherlands tax treaty, this protects expats from double taxation.
Enjoy the Beauty of the Netherlands!
We hope this guide has given you a better understanding of what taxes are like for US citizens living in the Netherlands. If you still have questions, we have the answers. In fact, we can even prepare and file your expat taxes on your behalf.
Learn where the best tax havens are, common traps, and ways to save money on your US expat taxes.