Melissa Groves, Managing Certified Public Accountant (CPA) at Bright!Tax, notes that moving to the Netherlands from the US is an exciting life chapter. However, cross-border tax and financial considerations feature prominently in the concerns of American expats.
In this article, Melissa breaks down some of the most common hurdles associated with preparing to move to the Netherlands from the US, what to do when you’ve arrived and how to navigate international taxation.
Preparing for your move: Key stepsWhile many people leap to the packing, storing and downsizing aspects of moving abroad, there are some up-top administrative considerations too.
Visa practicalitiesBefore moving to the Netherlands from the US, you will need to obtain the necessary visa for your stay. In many cases, this is a work, study or family visa, but there are many other options available on the Dutch government website. You will also need to ensure that your spouse or dependents apply for and receive the appropriate visa(s).
Moving companies for your possessions and petsCheck if your employer covers this expense. Otherwise, research accordingly to plan your own arrangements.
Bring US medications with youBring a three-month supply and original prescriptions to ease the transition to Dutch equivalents.
Plan for how you will transfer your fundsDepending on how long you intend to stay in the Netherlands, it’s likely a good idea to speak with your US bank about your upcoming move. Doing so will ensure that your account doesn’t get flagged for suspicious activity, and you can get quotes for how much they will charge to convert and move your money to your Dutch account when you have one.
As a tip, consider that there are many different money transfer services available. Often traditional banks quote a high price but typically will negotiate against competitor rates.
Finding accommodationJoin Facebook groups and online expat forums to learn more about how expats in the Netherlands find the best accommodation. These resources also help you “get a lay of the land”, so to speak, by providing insight into which parts of the city are desirable for living and which might be less so.
Setting up your new life in the NetherlandsThe Netherlands requires that those staying for periods longer than four months register with their municipality. Your municipality is associated with where you live; you must check this off your to-do list within five days of arriving.
At your appointment, the municipality will issue you a citizen service number (BSN). A BSN is essential for all future interactions with the Dutch government as well as to enrol in the healthcare system.
Understanding the Dutch tax systemYou will pay taxes in the Netherlands if invited to file a return, receive a C-form or have income from the Netherlands.
Here is a quick overview of important information about taxes in the Netherlands:
Primary tax forms: P-form Tax deadline: May 1 Reporting website: Mijn Belastingdienst Administrative language(s): Dutch Tax treaty: Yes Totalisation agreement: Yes This information should give you a good starting point about how to deal with taxes when you arrive in the Netherlands.
Understanding US taxes for expatsUnlike the majority of countries in the world, the US has a citizenship-based taxation model.
This means that all US citizens and Green Card holders who meet certain income thresholds are required to file a US federal tax return. Typically, US expats living and working in the Netherlands will need to file a tax return to the IRS each year.
Key tax deadlines for US expatsThe important details for you to know about deadlines for US citizens living abroad are:
April 15: Filled-in tax returns with any taxes owed are due. June 15: However, all US expats get an automatic filing extension until this date. October 15: Upon request, a second extension is available until this date. The FBAR filing requirement is also due. December 15: A third extension to December 15th can be requested. The benefits of working with a US tax providerMany US citizens move abroad without a firm understanding of how drastically their tax-filing obligations will change. The impact of the decision to move abroad reverberates throughout all aspects of financial planning, necessitating a skilled and certified cross-border expert to guide the way. By choosing to work with the best service providers in the industry, you’ll ensure that your US tax returns are filed correctly and to your best advantage.
The experts at Bright!Tax have been serving the American expat community for over 10 years. Founded by expats, their team is qualified both on a technical and a human level to guide you through the most tax-efficient strategy for you.