Dutch citizens who also hold American nationality are required to file taxes in the United States. The American tax service has been chasing Americans abroad for years and is now becoming stricter. On Friday, it was announced that the possibility of filing with a temporary Social Security number will expire. Additionally, people who were unaware that they were required to file taxes were able to take advantage of a voluntary compliance program. The end of that program has also been announced and people who have not yet filed taxes can expect to receive high fines.
According to the organization Americans Overseas, this affects a hundred thousand people in the Netherlands and the Dutch Antilles. They are required to file taxes because they hold American nationality or possess a Green Card.
If they did not have an SSN (American Social Security Number), that was previously solved with a temporary SSN number. That possibility is now gone. An SSN application takes 6 to 9 months. If it is not possible to use the voluntary compliance program in time, people will face higher demands and fines for not complying.
Daan Durlacher, co-founder of Americans Overseas, an organization that helps Dutch citizens with these tax issues: “There is now an urgent meeting with international accountants to see what is still possible to help people without SSN. The fines can amount to 50% of the highest balance on your bank account.”
In 2015, the Dutch government accepted the consequences of the American law FATCA (Foreign Account Tax Compliance Act). This meant that Dutch financial institutions were required to provide information about their customers (including bank balances and personal information) to the American tax service (IRS).
Dutch citizens with American nationality have not been informed of the requirement to file taxes by either America or the Dutch government. Furthermore, the information provided by banks is also lacking, as shown by a study conducted by Americans Overseas on behalf of the government in June.
Listen here to the full Radio1 broadcast: American tax agency closes in on Americans in the Netherlands.
Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.
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