All Dutch citizens who also happen to be subject to tax in the United States, the so-called unintended Americans, will also be sure of their bank account after 1 September. The Dutch Banking Association reports this on Friday after a letter to Parliament from State Secretary Marnix van Rij (Finance, CDA). The letter is a response to a letter from the US Treasury Department to the Dutch ambassador in Washington.
The unintended Americans with balances under $50,000 had previously heard from the banks that they could hold their account even though they didn’t have a US tax ID (TIN). The banks now conclude on the basis of the American letter that they can now also make that promise provisional for the group with more than 50,000 euros in the account.
The fact that the accounts of the unintended Americans (Dutch citizens who are seen as Americans in the United States, for example by birth in that country or by an American parent) were at risk, is due to the very broad, extraterritorial tax liability in the US. The US has been trying to enforce that tax liability for years by requiring banks to pass on data from the unintended Americans among their customer base to the US tax authorities IRS. Banks must provide name, address, balances and tax number (TIN) for this.
High fines
For the proportion of unintentional Americans who were in danger of losing their bank account, the problem was in the latter: they do not have a TIN or did not want to apply for one because they believed they were not Americans.
For a long time, Dutch banks believed that without providing such a TIN, there was a danger that they could be regarded as banks by the Americans as ‘non-compliant‘. This could have resulted in large fines or exclusion from the international financial system. To prevent this, unintentional Americans were informed that without a TIN they would lose their bank account.
The Ministry of Finance and the Dutch ambassador have been discussing a solution with the US for years about the group’s problems. Two years ago, the banks promised not to close accounts until September 1 this year, pending the outcome of those talks. The banks have now extended that until after September 1, regardless of the balance on the account.
The letter from the US authorities does not provide a definitive solution. Detailed guidelines are still being worked on. The idea of that ‘guidance‘ the Americans already make clear: if the banks have followed the guidelines and still cannot provide a TIN, they know for sure that they are not seen as ‘non-compliant’. The Americans write that now that they have promised this, they hope that the Dutch banks will no longer close accounts immediately.
The banks are now confirming this. “Due to the new letter, no accounts will be closed after September 1, and banks hope that the US will continue to work on a permanent solution to this problem,” writes the banking umbrella.