Wednesday 23 September 2020

Dutch tax minister to raise FATCA problems with Washington

Menno Snel. Photo: Henriette Guest via Rijksoverheid.nl

Tax minister Menno Snel is to raise the tax problems facing US nationals in the Netherlands when he visits Washington for talks next week, the finance ministry said on Thursday.

American citizens living in the Netherlands are required to pay US taxes – a rule which applies equally to US citizens who have never lived in the country as to those who are living away for a few years.

But more recent legislation known as FATCA – Foreign Account Tax Compliance Act –  requires all US citizens to supply the government with information about any assets they hold abroad, including bank accounts, houses and more.

It also requires non-US banks with American clients to furnish the IRS with information about those holdings. The problems have led some Dutch banks to say they will block US-owned accounts unless their owners provide a US tax number before October 1.

Red tape

‘This week I spoke to a number of Dutch people who experience problems because of the American FATCA regulations,’ Snel said. ‘They are confronted with high costs and red tape, while they did not even realise they are liable for tax in the US.

‘I am going to do my best to try to find a solution for these people while I am in Washington,’ the minister said.

Some 20,000 US nationals live in the Netherlands and ultimately 95% of them don’t have to pay any taxes in America after they have dealt with the bureaucracy, Snel said.

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