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Dutch taxation of US retirement savings withdrawals

Last activity 15 July 2021 by Ssccottt

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Ssccottt

Hello...I intend to retire in the NL within the next 10 years and the bulk of my retirement savings is in a US based 401K account.  My preliminary Google research indicates that I would have to claim those retirement withdrawals as box 1 income and pay Dutch taxes, however I met with a financial consultant today that suggested I could have the 401K withdrawals deposited in a US bank account and access funds in NL via an ATM card while only paying the lower US income tax.  Does anyone have any experience with this?  If this is not the case, then I may start directing more of my retirement savings into a Roth account which should have tax free withdrawals after paying US taxes upfront regardless of where I retire.  Appreciate any insight the forum community can share.

Thanks,
Scott

Ramses K.

Your fiinancial consultant is wrong you will have to pay taxes in the Netherlands.

Cynic

Hi and welcome to the Forum.

You will be assessed on your worldwide income for taxes based on the rules extant in the country where you are classed as a resident for the greater part of the tax year (so > 183 days).  One of the "benefits" of being a US citizen is that they will also assess you for both Federal and State taxes on top of this; so you could end up making declarations to the Dutch Belastingdienst, the IRS and your home state.

There is a dual tax agreement in place between the USA and the Netherlands, it covers pensions (where home nations almost always claim primacy), specific agreements that may exist on who taxes who and when where.  The thing that catches most of us Expats out is the agreement only covers income taxes; the Dutch also have social taxes which are not covered by the agreement and if you are below Dutch retirement age, can be extortionate (at least I thought so).

Bottom-line is, the Belastingdienst will assess you on your worldwide income and assets for taxes (both income and social) if you are deemed as being resident in the Netherlands - there is no way around this.  The unknown is how much they want to charge you; my advice is to speak to a Dutch tax adviser so you know the answers before you get the shock we did.

Hope this helps.

Cynic
Expat Team

Ssccottt

Thanks!

Ssccottt

Appreciate the info guys!

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