Accidental Americans

Blauwe stoelen Tweede Kamer

Accidental Americans are people who hold United States citizenship despite the fact that they were born outside the United States and have never lived, studied or worked in the United States. Because United States' policy imposes tax obligations on anyone who holds U.S. citizenship, accidental Americans may have an obligation to pay additional taxes to the United States Internal Revenue Service.

Difficulties for both customers and financial institutions

In accordance with the Foreign Account Tax Compliance Act, also referred to as FATCA, financial institutions must provide the Internal Revenue Service with information on any customers identified as having United States citizenship. This means that accidental Americans may run into difficulties when carrying out financial transactions in the Netherlands such as opening a bank account or taking out a mortgage.

Tax legislation

Dutch MPs have raised questions in parliament about the possibility of improving the accidental Americans' situation. In response, the Dutch state secretary for Finance, Mr Snel, explained that a thorough solution can only be achieved by adjusting the United States federal tax legislation. This explanation prompted the Finance Committee to write a letter not only to the United States Congress as a whole but also to individual members of the Republican Party and the Democratic Party, namely those who are involved in tax legislation in either the U.S. Senate or House of Representatives.

Avoiding double taxation

In its letter, the Finance Committee expressed the hope that the United States Congress will make an effort to exempt United States citizens from double taxation if they currently reside in the Netherlands and have no connection with the United States other than their American citizenship. Furthermore, the Committee urgently requested that the accidental Americans' access to financial services in the Netherlands be restored. Apart from the Financial Committee's action, the European Parliament adopted a resolution on the negative consequences of FATCA for EU citizens last July.

It is unusual for countries to impose tax filing obligations solely on the basis of citizenship. The United States and Eritrea are the only countries that do so. In other countries, tax obligations are based on a person's place of residence.