NVB: FATCA US-TIN not required for balances under $50,000

By 28 August 2022News

The Netherlands Bankers' Association (NVB) announces: FATCA US-TIN not required for balances under $50,000

The Netherlands Bankers’ Association (NVB) announces that after September 1, Dutch banks will not close accounts of so-called coincidental Americans if the balances in the checking or savings account do not exceed $50,000. 

Coincidental Americans, FATCA, and US-TIN/SSN

Dutch coincidental Americans are Dutch citizens who the US sees as American: Dutch citizens who automatically have US citizenship by birth, parents, or Green Card. These citizens get into trouble because the US has an extraterritorial tax obligation. Everyone with American nationality must file a tax return in America, even if they have only lived there for a short time or not at all. This can lead to double taxation.

The American Tax Act (FATCA) requires banks to pass on the name, address and balances of such an account holder, stating his/her tax number, a TIN/SSN of all US persons in their client files to the Dutch Tax Administration. The latter then passes on the data to the IRS.

US-TIN not required for balance below $50,000

Last year, Dutch banks decided to refrain from closing accounts of U.S. Dutch citizens without a TIN until September 1, 2022, to give room to find a long-term solution with U.S. authorities.

Now the NVB is letting it be known that even after September 1, no accounts will be closed of so-called coincidence Americans if the balances in the checking or savings account do not exceed $50,000. 

Coincidental Americans with balances above $50,000

For the group with a balance above $50,000, the account will not be closed if they can be shown to be in the process of applying for a U.S. Social Security Number (US TIN/SSN) or have begun the process of renouncing their U.S. citizenship.

In any case, to avoid problems when the balance rises above $50,000 during the year, it is wise for US citizens to start the application process for a US TIN.

A balance of more than $50,000 may seem like a lot to many casual Americans, but it can suddenly be achieved through, for example, the sale of a car, the receipt of vacation pay, the sale of a house, and the receipt of an inheritance. Sometimes even unplanned. The bank should, if the balance was above 50,000 at any time during the year, pass on the account details with US-TIN/SSN.

US-TIN/SSN applications and US tax returns

Coincidental Americans usually do not have such a number, and applying for one takes a lot of time and effort. Renouncing American citizenship is a possibility, but obtaining the required Certificate of Loss of Nationality (CLN) takes a long time and is very expensive. Moreover, a tax return must still be filed for the past five years, the so-called exit tax.

Need more information about Dutch banks and US-TIN/SSN?

We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother. When we heard about this for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?).

It is (unfortunately) true that there is an additional American tax levy. But there’s no information from local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.

That’s why we started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.

If you have more questions about how to renounce US-TIN/SSN applications and US tax returns you can contact us at Americans Overseas.

Contact us for more information

 

Source: NVB