By Kaitlin M. Krozel, CPA | | 4.11.26

As featured in Passport to Wealth

You may have moved to the Netherlands for the canals, the culture, and perhaps the professional opportunity of a lifetime. Unfortunately, your move came with two roommates you never expected…the Belastingdienst and the IRS. With the Dutch tax landscape undergoing its most significant transformation in decades, it is extremely important for US expats living in the Netherlands to stay informed and start planning for the future now.

U.S. & Dutch Taxation: Why Do I Have to File in Both Countries?

It is vital to remember the foundational “why” of your tax return. The United States taxes its citizens based on their citizenship rather than their residency. Whether you are a U.S. citizen, a green card holder, or a dual national, the IRS requires you to report your worldwide income every single year, regardless of where that income was earned, how it was paid to you and in what currency.

The Netherlands, by contrast, taxes you based on your residency within their borders. This creates a complex overlap where your salary, investments, and even your savings accounts are scrutinized by two different governments. While the U.S.–Netherlands Tax Treaty exists to mitigate double taxation, it does not exempt you from the filing your US tax return. As an expat you may also be subject to filing FinCen Form 114 (a.k.a ‘FBAR’) yearly to report your non-US financial accounts.

Failing to file is considered a criminal offense, and with increasing information sharing between the Dutch Belastingdienst and the IRS under FATCA, the shadows are getting much smaller.

The 30% Ruling Is Winding Down and What That Means for Your Cash Flow

Starting in 2026 expats have also been hit with the abolishment of two key deductions: one for the additional cost of living and the other for non-business telephone calls back to your home country. While these were removed to level the playing field between expats and Dutch citizens, it’s still another cash flow punch to the gut.

But there’s more…to fund the reversal of VAT increases, the Dutch have not fully adjusted income tax brackets for inflation in 2026. For you, this means your income could fall into a higher tax bracket sooner. In 2026, the upper threshold for the first income tax band is €38,883, while the second band will top out at €79,137. With the top Dutch tax rate at approximately 49.50% for income above €78,426, proactive cash flow planning is no longer optional—it is a survival skill.

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