Living in Netherlands with USA income

I'd recommend you spend more than a week there before upheaving yourself and moving.  Tourists tend to see things with rose tinted glasses.  You might consider spending 90 days there as allowed visa free, and get more of a feel for life and reality there to some extent.

Romaniac
Expat.com Experts Team

You're absolutely right. I should've have mentioned we plan to spend 2 months there next year to see what truly living there; not vacationing there, is like.

Where you pay tax is generally decided by where you live (domiciled).  If you live in Holland, you pay taxes in Holland.  That said, there is a double-taxation agreement in place between the USA and the Netherlands; this basically says that Holland won't charge you again on income already taxed in the US.

Sounds OK so far, however, the Dutch have a whole lot of other social taxes (28.5% of your income) which are not covered by the agreement and you will have to pay in Holland.  This link will take you to a webpage that explains this.  You also need to consider local Dutch taxes (for waste disposal, local services etc) - this varies depending on where you live.

As a US citizen, you also have to consider your liability to continue to pay US State taxes when you move abroad; it varies from state to state, I'd advise you to check with your US state tax office.

With regards to country comparisons; the Numbeo organisation publish a webpage where you can do a comparison between where you live now and where you intend to live; this link will take you there.

Hope this helps.

Cynic
Experts Team

Excellent post from Cynic 

Also I want to add that the places you mentioned to live is expensive and difficult to rent. Maybe buying is a better option  (but then again not cheap ) if you are sure to stay on a more permanent base.

Thank you! The other social taxes that you mentioned, the 28%, can you give me some examples? I've researched taxes so much and I'm not sure where this fits in.

The taxes I researched us paying would be as follows:
Income taxes to USA
Real estate tax, refuse tax, water & purification taxes to NL.

I'm assuming on top of the water and refuse taxes there are also monthly or yearly payments made as well?

Insurance was another biggie I saw in NL. In the US, insurance is crazy expensive. You'd be crazy to buy it for every possible situation. I see it's exceptionally reasonable in the NL.

It seems like all we would really need are health (which I know is required), home, contents and liability (because it's so cheap, why not?). We would not drive a car, but opt to cycle instead.

I'm a stickler and would never move somewhere without crossing all my t's and dotting my i's. I don't want to be another American with a lofty dream of living in NL, only to move back home months later, broke! Ideally we would be buying a home, not renting. Committing ourselves to 5 years unless for someone reason it wasn't possible. Like not being aware of every financial situation we could find ourselves in.

Thanks again, folks!

Hi - these social taxes pay for pensions (AOW), widow(er)/surviving dependants support (ANW) and exceptional medical expenses (AWBZ); the letters in brackets are what the Dutch call it.

AOW - is for your Dutch State pension.
ANW - is pretty much what it says.
AWBZ - the state does not allow insurers to bar anyone from cover (hence the extra payment from taxes); rather than one person pay a humongous amount, every one pays a little bit to help - the Dutch are a very social people.

You can't opt out of any of them - everyone pays.

When we first moved to Holland (I'm a Brit), I wasn't aware of these and got hammered for a whole years worth when I submitted my tax return (everybody must submit a tax return by law).

The water and refuse charges are taken monthly from your bank account.

Healthcare insurance (ZFW) is absolutely compulsory; kids are normally added to your own policy, but you do have to notify the Insurer for that to happen.

Once you arrive in Holland, you (officially) have 7 days to register your permanent address with the Gemeente (Town Hall); when you do that, you will get a BSN number, it enables you to open a bank account, pay your taxes and the water/refuse charges, register with the doctor and register a car.  Don't forget, if you subsequently move, you have to de-register and then re-register with your new address.  Be prepared for lots of walking around.

If you need advice for planning your move, at the top of the page is our handy tools link, it will take you to several expat guides that will answer some of your questions.

One last point - learn Dutch, it will make your life so much easier.