New US-NL Tax treaty?The U.S. Foreign Account Tax Compliance Act (‘FATCA’) requires non-US financial institutions (banks, insurance companies, investment companies, etc.) to provide information on their US related accounts to the IRS. To implement the FATCA provisions the US and the Netherlands have concluded a separate intergovernmental agreement. US citizens living in the Netherlands are obliged to file US income tax returns. In the absence of US source income, a lot of US citizens did not file these returns. As a result of FATCA, these persons are obliged to repair this (in combination with an amnesty arrangement). The Netherlands parliament has brought forward various problems that arise from US world-wide taxation based on citizenship and the Netherlands world-wide taxation based residency. The US-Netherlands tax treaty does not solve all these issues. Apparently the US government has published a proposal to deal with some of the issues (https://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2017.pdf) On 27 May 2016 our Ministry of Finance announced that the Netherlands and the US Treasury have the intention to ‘modernize’ the existing tax treaty between these countries. This same Ministry will include the above issues in the treaty discussions.
