Incorrect approach of Dutch banks towards American Dutchmen

Various media
Erasmus School of Economics

There is fear and disbelief among Dutch people who also have an American nationality. They have been told by their bank that their accounts will be closed if they do not provide an American tax number before 1 October. In NPO Radio 1’s Reporter Radio, tax specialists and lawyers are consulted, including Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics, and they indicate that the banks are in the wrong. Closure is not necessary at all.

‘FACTA is an invention of the U.S. Government to obtain data on the financial position of all U.S. nationals,’ explains Kavelaar. ‘The American tax system is linked to nationality. So, it does not matter where those nationals are in the world, if they have American nationality, then the U.S. tax authorities want to have the information about bank accounts, etc.’

According to Kavelaars, the banks do not provide this information directly to the American government, but to the Dutch tax authorities, by means of the intergovernmental agreement (IGA) between the U.S. and the Netherlands. The banks require their American Dutch customers to provide an American tax number. If such a number is not delivered before 1 October, the banks threaten to close or block the bank account. According to the banks, there is no other option, due to American regulations.

However, according to tax experts this threat is not based on anything, and the IGA is set up in such a way that if a bank has to deal with recalcitrant account holders, then accounts do not have to be closed. They still do have to pass on all the data that de bank does have to the tax authorities. Kavelaars confirms this view. ‘The core of the IGA is precisely to relieve banks of their obligations. Moreover, I do not see that American tax authorities coming up with all kinds of sanctions, because here is an IGA.’

More information

Listen to the entire item of NPO Radio 1, 7 September 2019 (in Dutch).

You can also read the article of De Volkskrant, 20 September 2019 (in Dutch).