Thursday 19 September 2019

Accidental American tax chaos best dealt with by Europe, Dutch say

The Netherlands has called on EU member states to campaign together for changes to American tax laws which are affecting thousands of people who have American nationality but no ties to the country.

Junior finance minister Menno Snel has told MPs that the Netherlands has ‘again’ raised the issue in a European context. ‘The cabinet thinks a coordinated signal by Europe is the strongest approach, whereby other European countries would join the Netherlands and France,’ Snel said in answer to MPs questions.

In addition, the problems facing ‘accidental Americans’ was raised during prime minister Mark Rutte’s recent visit to the US, the minister told MPs.

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 from next January.

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 because of fears they could face sanctions.

Snel says the government does not share the banks’ view that they could face tough sanctions for non-compliance and pointed out that under European law, banks are required to provide everyone living in the Netherlands with a basic bank account.

‘In the end it is up to the regulators to take action if rules on access to basic bank accounts are not met,’ Snel said.

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