U.S. Taxes for Americans in the Netherlands  – What Expats Need to Know

Expat Living In The Netherlands

The Netherlands is a small country in Western Europe known for its flat land barely above sea level. This “Low Country” is known for the largest seaport in Europe (Rotterdam), The Hague, world-recognized as the “International City of Peace and Justice”, windmills, and tulips. While Amsterdam is the capital of this country, The Hague is the seat of its constitutional monarchy and parliamentary democracy.

Expats choose this country for its reputation for social tolerance and liberal government policies. Despite its geographic size, the Netherlands is a member of many internationally recognized economic and political groups. It’s one of the founding members of the Eurozone, a member of NATO and the G-10, and part of the economic union known as Benelux (Belgium, the Netherlands, and Luxembourg).

As of early 2026, approximately 78,000 U.S. citizens live in the Netherlands, drawn by safety, efficient infrastructure, and opportunities in sectors such as tech, finance, and international law. The country offers excellent public transport, bike-friendly cities, and universal healthcare, though challenges include a persistent housing shortage (especially in urban areas) and high living costs in popular spots.

Expats working in the Netherlands should note updates to immigration and employment rules since the 2014 changes to the Foreign Workers Act. The Highly Skilled Migrant (Kennismigrant) scheme remains popular for non-EU workers, with salary thresholds adjusted annually. The expat-friendly 30% ruling (now scaled to 30-20-10 over five years starting in 2024) provides a tax-free allowance on salary for qualifying highly skilled migrants, though changes in 2025 ended partial non-resident status for certain income categories.

Below is our top 10 list of cities in the Netherlands for expats (in no particular order):

• Amsterdam
• Rotterdam
• The Hague
• Utrecht
• Eindhoven
• Tilburg
• Groningen
• Almere
• Breda
• Nijmegen

The Netherlands maintains a service-oriented economy with with major international headquarters in finance, tech, logistics, and hospitality/tourism. The country, with its temperate climate of mild winters and summers, boasts many forms of transportation, making it a key travel hub on the European continent. Its local culture welcomes people of diverse backgrounds. The euro and the U.S. dollar are the country’s standard currencies.

Guide To U.S. Expat Tax In The Netherlands

The Tax Samaritan country guide to US expat tax in The Netherlands is intended to provide a general review of expat tax in The Netherlands and how that will impact your U.S. expatriate tax return as a U.S. Expat In The Netherlands.

As a U.S. taxpayer, all worldwide income is subject to taxation and reporting. For most expatriates, you’re required to file a U.S. tax return on an annual basis due on April 15 each year (June 15 if you are residing overseas on the April 15 deadline). The tax treatment for different classes of income can vary greatly between the Netherlands and the U.S.

For example, certain benefits may be tax-free or excluded from taxable income in the Netherlands, but in the U.S., these benefits are likely to be non-qualified benefits that are subject to being included as taxable income in the U.S. As such, there are a number of considerations related to U.S. expat tax in the Netherlands, and this brief article will address a few of those considerations.

The Netherlands Expat Income Taxes

Who Is Liable For Income Taxes In The Netherlands

Residency, the key factor in determining taxation in the Netherlands, is based on circumstances and personal ties rather than the number of days physically present in the country. A person who resides in this country is taxed on their worldwide income.

In comparison, non-residents are only taxed on their Netherlands-source income. There are special situations where a resident may choose to be a “partial” non-resident, and, alternatively, non-residents can voluntarily elect to be classified as a resident. Employment income is typically not taxable if an employment period lasts fewer than 60 days.

Tax Year In The Netherlands

The Dutch tax year aligns with the calendar year, running from January 1 to December 31. Income is classified and taxed under the three-box system:

• Box 1 covers taxable income from work and home, including wages, director fees, income from personal services, foreign pensions (where employer contributions may count as taxable), and net income from a primary residence (via the eigenwoningforfait, or deemed rental value, often referred to as “real estate valuation tax”). Box 1 uses progressive rates, currently up to a maximum of around 49.5% for higher brackets (with lower combined rates including national insurance in the first bracket, typically around 35-37% for mid-range earners, adjusted annually).
• Box 2 applies to income from substantial shareholdings (aanmerkelijk belang), such as dividends and capital gains from qualifying shares or business assets. This is taxed at a flat rate in two brackets (e.g., 24.5% on the first portion and 31% above the threshold, with the threshold indexed each year). Other forms of capital gains (outside Box 2) are generally not taxable.
• Box 3 taxes savings, investments, and certain other assets based on a deemed (notional) return rather than actual gains. A tax-free allowance applies, and the effective rate on the deemed income is around 36%. Non-residents are taxed only on Dutch-source income in the relevant boxes.

Tax Filing, Payment, And Other Rules

Filing for income tax (covering the previous calendar year) usually opens in March, with the standard deadline of May 1. Filing early typically results in faster assessments and refunds (before July 1 in many cases). Extensions are available up to September 1 or longer when using a tax advisor.

Provisional tax assessments are common, with payments due according to the schedule in the assessment. While there is no general net worth tax, the Netherlands imposes inheritance and gift taxes, ranging from 10% to 40%, depending on the relationship between donor and donee and the value transferred (with annual exemptions and progressive brackets).

In certain cases, Dutch nationals who emigrate may remain subject to Dutch income tax rules, particularly exit taxation on substantial interests in Box 2, for up to 10 years, though deferrals or treaty relief may apply depending on the new country of residence. There are also EU-level arrangements for automatic exchange of information on foreign bank accounts of residents. Always check the latest rates, thresholds, and deadlines directly with the Belastingdienst or a qualified tax professional, as minor changes occur annually.

Expat Tax Withholding In The Netherlands

The Netherlands has a variety of tax changes and exemptions that have changed terms of employment in recent years. In general, benefits to employees have or will soon be considered taxable income. Both residents and non-resident expats are best served if they consult with a practiced tax specialist.

Expats also need to be aware that there are “precautionary tax assessments” on for example pension entitlements when a taxpayer leaves the country. Despite tax code changes, there still are personal tax credits and deductible expenses relating to primary residence, insurance premiums, and even a moving allowance.

There is also a special 30% facility, or tax-free allowance, on employment income depending in part employment terms and length of residency. Consideration is also provided to foreign nationals in the form of a tax-free reimbursement for education costs of dependents attending an international school.

Social programs called the National Insurance Acts and Employee Insurance Acts provide benefits to all residents. Individual health insurance is also mandatory. Contributions are payable based on taxable income. Since expats are subject to these social programs, double social security contributions are likely. The Netherlands has entered into a Totalization Agreement with the US discussed below.

The United States has a Netherlands tax treaty. Consequently, tax returns of US expats, especially in The Netherlands, require analysis by an international tax specialist like Tax Samaritan.

What You Need To Know About US Expat Tax In The Netherlands

When dealing with US expat tax in The Netherlands, there are a number of preferential expat tax treatments that may benefit your U.S. expatriate tax return. In fact, for many U.S. expats, the Foreign Earned Income Exclusion (IRS Form 2555) and other deductions will reduce your U.S. taxes to zero.

Some of these preferential tax treatments or benefits for US expat tax in The Netherlands include:

• If you are a U.S. citizen or a resident alien of the United States and you live in The Netherlands, your US expat tax in The Netherlands is based on your worldwide income and as such you must file a U.S. return for all the years that you are residing in the Netherlands. However, as a U.S. expat you may qualify to reduce your U.S. taxable income up to an amount of your foreign earnings that is adjusted annually for inflation ($130,000 for 2026). In addition, you can exclude or deduct certain foreign housing amounts. This is known as the Foreign Earned Income Exclusion and foreign housing exclusion.
• When it comes to your US expat tax in the Netherlands, most U.S. expatriates worry about “double taxation” – paying taxes to two different countries. A U.S. taxpayer working overseas in the Netherlands may be able to reduce U.S. taxable income and “double taxation” by claiming the Foreign Tax Credit on Form 1116. Should any foreign income not be fully offset by the foreign earned income exclusion, housing exclusion or housing deduction, the foreign tax credit paid or accrued may be used as a deduction or credit on the U.S. tax return. Taxpayers can elect to either deduct the taxes as an itemized deduction on Schedule A or claim a credit against tax. In most cases, it is to your advantage to take foreign income taxes as a tax credit.

A common but dangerous mistake is the assumption that if there are zero taxes owed with these tax benefits that a return for US expat tax in the Netherlands does not need to be filed. That is not true. If you are working overseas, it is likely that you meet the filing requirements to file a tax return and must do so. It is important to note that the preferential tax treatments, such as the foreign earned income exclusion and foreign tax credit are not applicable to the outcome of your tax liability until they are claimed on a filed tax return.

When faced with U.S. expat tax in the Netherlands there are many tax items to consider, but the above are by far the most common preferential tax benefits. With top-notch experienced and knowledgeable expat tax preparation from Tax Samaritan, you can be assured that you are paying the minimal amount of U.S. taxes that you are legally obligated for.

The Netherlands Foreign Bank Account Reporting – The FBAR (FinCen Form 114)

Another important tax deadline that frequently applies to US expat tax in the Netherlands is in regards to the disclosure of foreign assets on the FBAR (Foreign Bank Account Report – Form 114).

The FBAR (FinCEN Form 114) filing deadline is April 15 (or the next business day if it falls on a weekend or holiday) of the year following the calendar year being reported. Unlike your individual tax return, requesting an extension on Form 1040 (or the automatic expat extension to June 15) does not extend the FBAR due date. However, FinCEN provides an automatic six-month extension to October 15 (or the next business day) for all filers.

The FBAR must be filed with the Treasury Department (it is not filed with your federal income tax return) whenever you meet the FBAR filing requirements. You must file if you are a U.S. person (citizen, resident, etc.) who has a financial interest in, or signature authority over, one or more foreign financial accounts, and the total (aggregate) value of those accounts exceeds $10,000 at any time during the calendar year.

If you have bank accounts at ING bank (acquired by Postbank), Rabobank Internation, ABN Amro (acquired by Fortis Bank), Garanti Bank International NV, F. van Lanschot Bankiers, SNS.bank, ASN Bank or at another bank in the Netherlands or any other foreign country, you may meet the filing requirement to disclosure your foreign accounts on the FBAR.

Please don’t hesitate to contact Tax Samaritan to learn more about your filing requirements.

U.S. – The Netherlands Social Security Totalization Agreement

The United States has entered into agreements, called Totalization Agreements, with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. These agreements must be taken into account when determining whether any alien is subject to the U.S. Social Security/Medicare tax, or whether any U.S. citizen or resident alien is subject to the social security taxes of a foreign country.

As of this time, there is a Netherlands Totalization Agreement with the United States thus there is no opportunity to avoid double taxation of social security income for US expat tax in The Netherlands.

U.S. – The Netherlands Tax Treaty And Tax Relief For US Expat Tax In The Netherlands

The United States currently has a separate Netherlands tax treaty. The US Internal Revenue Code offers tax credits against any the Netherlands income tax.

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Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our US expat tax in The Netherlands. We are not only tax preparation and representation experts, but strive to become valued business partners to American expatriates in The Netherlands. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.

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