Message Font: Serif | Sans-Serif
No. of Recommendations: 1
> I *may* be moving to Holland for 2 years. Anyone have
> information on how an American living abroad pays
> taxes on investment income in the US? Would I have to
> pay US and Dutch taxes?

Two things in life are certain. Death and taxes. The IRS seems more astute than others at collecting taxes, even if you are overseas. The taxes work like this: if you reside outside the USA for a minimum of 330 days out of 365, you pay no US tax on the first $72K of foreign EARNED income. You will most likely still have to pay Dutch taxes (at source) on your earned income. Depending on the Dutch rules, the duration of your stay, and if you are considered a resident you may or may not have to pay Dutch taxes on your 'world wide income'. If you do pay Dutch tax on your 'world wide income' you will be granted 'foriegn tax credits' by the IRS. In a nutshell, you will have to pay somebody taxes on both your investments, and your extrenal income. You will have to Uncle SAM the difference in taxes if Dutch taxes are actually lower.

I have been living in Germany and Switzerland for the last five years and this is how I have played the game. It get complicated pretty quick, and if I have said anything that does not seem right please let me (it affects me too!)

> I have discovered that if I open an account with
> mega-goliath bank Citibank, they will accept deposits
> in gulders and convert them to dollars, thus enabling
> me to make deposits in US brokerages.

I have found that virtually all banks in europe allow you to make wire transfers to any bank you wish. Of course this often costs. The normal fee is about $15-$20 on the European side and $5-$15 on the American side. The trick here is to transfer X Guilders to a US Bank where they are immediately converted to dollars. I normally keep a stateside account to pay US denominated bills, and I have a local account to keep my Franc/Marks/Guilders safe (also for local bills) until the exchange rate hits a favorable point for me and then I do a bulk transfer. This seems to work for me, I do not loose as much in the transfer and I can keep working with the institutions I am comfortable with. So, I guess what I am saying is that Holland is a very modern country, and, especially in Holland, any thing is possible. You just need to explore the costs involved in using each method.

BTW: When investigating this please be sure to ask about what type of exchange rate they will give you. The cash rate is pretty normal, it means the bank keeps 2% of the transaction. Most electronic transfers should be under 1%, and there are some banks that base this on a sliding fee (for example: 1.25% of the transaction until $50) These kinds of fees I like the best.

Best Wishes!
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.