NRC: More Americans Are Moving to the Netherlands

According to a recent article published by NRC, the number of Americans moving to the Netherlands is increasing. More US citizens are choosing to build a new life in the Netherlands, including through the Dutch American Friendship Treaty (DAFT). Behind this growth are very different personal stories. Some Americans leave in search of business opportunities, while others are looking for greater stability, personal safety or a better future for their families.

Whatever their reason for moving, one important fact remains: US citizens may continue to have American tax and reporting obligations while living in the Netherlands.

Why are more Americans moving to the Netherlands?

The personal stories highlighted by NRC show that the decision to emigrate is rarely based on a single issue.

One woman, a maternity nurse from Texas, had become increasingly concerned about the effect of stricter abortion legislation on pregnancy care. Through her work, she witnessed complex medical situations in which legal restrictions and personal beliefs could influence the care available to pregnant women. When she became pregnant herself, she and her husband decided that they would rather build their future in the Netherlands. She says that living here has given her family more peace of mind and a greater sense of stability.

Another American moved to the Netherlands with his wife and their three young children. Although he earned a good income in the United States, housing, healthcare and everyday expenses were becoming increasingly difficult to manage. The couple were also concerned about social developments and the safety of their children. In the Netherlands, seeing his children cycle to school independently has become a symbol of the more relaxed life the family had been seeking. He now also helps other Americans who are considering a similar move.

A woman from California and her wife also decided to leave the United States. They had once expected to grow old in California, but became increasingly worried about social developments, LGBTQ+ rights and their future personal safety. They deliberately left on the day of the US presidential election. For them, the Netherlands offered an opportunity to start again without giving up their American identity.

Although every situation is different, these stories demonstrate that emigration is rarely driven by one consideration alone.

For many Americans, the Dutch American Friendship Treaty offers an attractive route to the Netherlands. This trade agreement, which dates from 1956, allows qualifying American entrepreneurs to apply for Dutch residence when they establish or operate a business in the Netherlands.

The arrangement has become increasingly popular. According to NRC, the number of Americans moving to the Netherlands through DAFT has risen significantly in recent years.

Moving through DAFT? Your US tax obligations continue

Obtaining a Dutch residence permit through DAFT does not end your American tax obligations.

DAFT determines whether an American entrepreneur may live and work in the Netherlands. It does not change their obligations toward the Internal Revenue Service (IRS).

US citizens and Green Card holders are generally required to file an annual US Tax Return, even when they live permanently in the Netherlands. Their return may need to include income earned from a Dutch business, employment income, investments and other sources of worldwide income.

Moving to the Netherlands may therefore mean dealing with two tax systems:

• the Netherlands may tax you as a Dutch tax resident;
• the United States may continue to require tax filings based on your US citizenship or Green Card status.

This does not necessarily mean that you will pay the same tax twice. The US–Netherlands tax treaty and provisions such as the Foreign Tax Credit can often help reduce double taxation. However, these rules generally do not eliminate the underlying US filing obligation.

Do you need to report your Dutch bank accounts?

In addition to a US Tax Return, you may be required to file an FBAR, or Foreign Bank Account Report.

An FBAR may be required when the combined maximum balance of your non-US financial accounts exceeds the applicable reporting threshold at any point during the calendar year. This can include Dutch current accounts, savings accounts and certain investment accounts.

The FBAR is separate from your US income tax return and is submitted to the Financial Crimes Enforcement Network, commonly known as FinCEN.

How does FATCA affect Americans in the Netherlands?

American expats may also encounter the Foreign Account Tax Compliance Act, better known as FATCA.

Under FATCA, Dutch banks and other financial institutions may ask whether you are a US citizen or US tax resident. They may also request your Social Security Number or Taxpayer Identification Number.

Depending on your financial situation, certain foreign assets may also need to be reported to the IRS as part of your US tax return.

For Americans moving to the Netherlands, FATCA can therefore affect both their relationship with Dutch financial institutions and their own US reporting obligations.

Additional considerations for DAFT entrepreneurs

American entrepreneurs who operate a business in the Netherlands may face additional questions concerning:

• income from a Dutch sole proprietorship or company;
• Dutch business and personal bank accounts;
• self-employment tax and Social Security contributions;
• Dutch taxes and allowable tax credits;
• pensions, investments and insurance products;
• the legal structure of their Dutch business;
• the correct reporting of foreign companies or financial interests.

The most appropriate US tax treatment will depend on the entrepreneur’s personal circumstances and the structure of the business.

It is therefore advisable to understand the tax consequences before moving or establishing a company in the Netherlands.

How can Americans Overseas help?

Whether you are considering moving through DAFT or are already living in the Netherlands, Americans Overseas helps US citizens and Green Card holders understand and manage their American tax and reporting obligations.

Our specialists can assist you with:

• filing your annual US Tax Return;
• preparing and submitting an FBAR;
• questions about FATCA and international reporting requirements;
• US tax questions relating to operating a business in the Netherlands;
• the Streamlined Filing Compliance Procedures if you have missed previous US tax returns;
• questions about obtaining or using a Social Security Number;
• advice and assistance concerning the renunciation of US citizenship.

Americans Overseas does not submit the DAFT residence application itself. Its role is to help Americans understand and address the US tax obligations that remain after moving to the Netherlands.

This allows you to focus on building your new life in the Netherlands while ensuring that your American tax affairs are handled correctly.

Related information: Read our page for expats to learn more about living abroad as a US citizen and the American filing requirements that may apply.

Get Informed with Americans Overseas

We, the founders of Americans Overseas, were born in the Netherlands and received our American citizenship through our (American) mother.

When we first learned about the U.S.–Netherlands tax treaty around 2013, we felt disbelief (“this can’t be true”), anger (“how can they do this?”), fear (“will I get fined or have problems?”), and panic (“what should I do?”).

Unfortunately, it is true that there is a U.S. tax obligation for Dutch citizens who acquired American nationality by birth. There was no information from local authorities, the U.S. consulate referred us to the IRS, and the IRS itself was impenetrable.

That is why we started this initiative: to help others with reliable information, to prevent unnecessary panic, and to offer free, no‑obligation assistance. When needed, we can connect you with a network of affordable professionals (accountants) who can help you meet your U.S. tax obligations.

Contact us for more information

Source: NRC