Government survey under Americans Overseas
America and Eritrea are the only countries in the world that have a worldwide taxation system regardless of where their citizens live or work. If your mother or father are US citizens you have to file and are taxable in the US even if you were born in Europe; this applies to green card holders as well.
If you were born in the US and moved away (even at very early age) you’re also taxable in the US. This is highly problematic because these people have to file in two countries.
In the beginning of June, Americans Overseas was asked by the Dutch government to conduct a survey among this group. The response was overwhelming: over 1000 individuals participated.
The outcomes and all the letters were handed to 13 parties in Parliament. Mr. Pieter Omtzigt (CDA) handed the report to State Secretary for Finance Mr. Eric Wiebes at a sitting held on June 1, 2016.
Problems that Americans Overseas are facing
The State Secretary recognizes the problems that Americans Overseas are facing. Extra high costs for professional assistance for filing taxes. Limitations with Dutch banks and problems with the tax treaty between the US and The Netherlands. This can be considered progress, because earlier there was no awareness of the problems facing dual nationals and their US obligations.
However: We want to emphasize and this has also been confirmed by the Dutch Parliament UNFORTUNATELY
Please do not have hopes that the US tax obligations will come to an end or change soon! We strongly advise to keep your US tax obligations up to date and become or stay tax compliant. This process may (if ever) take years to change.
State Secretary for Finance Wiebes had the following to say on US taxation (translated):
‘The legislation isn’t new it was always there. It is not something we can decide on, but the legislation does make it hard. The Netherlands can’t do a lot about it. When I couldn’t sleep as a little boy at full moon, I occasionally got angry at the moon. Well, I felt then that I had more power over the moon then I do now over the American legislator. We can’t do much, but what we can do, we should do, because the urgency with which people are coming forward with their problems is real. It could happen to you’
US legislation and not Dutch law
Only the US government can make changes for overseas Americans. The citizen-based tax system is US legislation and not Dutch law. Questions have been asked to US Congress members but so far there is unfortunately not any sign of change. We will continue to inform politicians (including the European Parliament) of the situation. We want to thank all those people who participated once again.
A summary of the survey:
|77%||Have never lived in the US or have moved back to Holland before the age of 10|
|73%||Have lived in Holland for 20 years or longer|
|60%||Have Dutch parents|
|80%||Are Dutch citizens|
|95%||Feel abandoned and left alone by the (Dutch and American) government. For the most part they point out that filing taxes twice is the problem. The treaty on prevention of double taxation does not function at all.|
|0%||Received information from the official authorities (Dutch authorities or US consulate)|
|27%||Heard of their tax obligations through the media|
|80%||Say that their bank provides them with poor information, or none|
|75%||Don’t owe any taxes but still have expenses, and experience insecurity in financially planning their future (retirement plans, mortgages)|
|25%||Have paid taxes in America on Dutch benefits, real-estate, income, savings, companies, retirement plans and funds that aren’t taxed by the Dutch government.|
|20%||Got restricted by their bank through FATCA, for example investment accounts liquidated, mortgage terminated, loan refused, account closed without forewarning|
|70%||Feel nervous or extremely anxious and greatly fear American penalties that can amount up to 200% of their possessions (please see explanation below)|
|96%||Don’t regard the US taxation of non-residents of the United States a logical measure|
- About € 100 million drains away from the Dutch economy for American fiscal expertise
- The amount of money involved in taxes on property, savings, benefits, stocks and shares, pensions and others, that drains off into the US has not yet been determined
- It is only possible to renounce your US citizenship if you have filed taxes 5 years back. The costs for resignation can amount to € 2.000 / € 3.000 on average. Subsequently, a fee of $ 2.350 will also have to be paid to the consulate for the administrative procedure. Total costs, therefore, can amount to an average of € 5.000
- Inquiry, in digital form
- Period of research May 2016
- 1071 respondents
The full report is viewable here: Research results US taxation of Americans Overseas