Life’s Certainties: the Dutch and Taxes

It’s January and there’s that sinking feeling in my stomach. Not the winter blues, nor the realisation that the New Years Resolution to lose 10 lbs by the end of the month is a lost cause.

No, this is the gargantuan beast from hell, the preparation of the annual tax return. You can’t forget about it, or pretend it’s not happening, stick fingers in your ears and hope it will pass you by.

This is serious stuff and like many people here in the Netherlands, we have to file returns to both the Dutch Tax authorities – the Belastingdienst – and the United States Department of Revenue – the IRS. They both provide hoops, we jump through them.

If we’re lucky and all goes well, the paperwork is completed and we pay any due balances to whoever demands it (who’s going to argue?). Worse case scenario we face a revenue audit by either country and go to purgatory. There is no get out of jail free card.

Before I go further I must stress the Captain and I are of the school that is upright, honest and likes to sleep at night. Life is stressful enough without trying to pull a fast one over a bunch of accountants. Our affairs are simple and straight forward, we are ordinary folk.

Unfortunately, as far as every revenue service in the world is concerned we are all secretly running mafia-like laundering operations worldwide, with off-shore accounts in tropical locations. Please. We’re not going to take on the revenue services, we’re too exhausted. We have children who run rings round us on the financial front, what chance do we stand with experts?

We want to pay our dues and get on with life.

Generally speaking the Dutch have a wonderful system of taxing foreigners – you are only taxed on what you earn in this country, which seems really fair to me. The USA, on the other hand, wants details of everything anywhere in the world, whether you reside in the states or not. They also demand that Green Card holders file a return too, not just citizens.

The American hoops seem a lot more intense or perhaps that’s just me. Filing, late filing, extensions, a gazillion forms, late payment penalties, interest penalties, these are all things that sink me into a gloom of despond. The aim every January is to get ahead of the game so we deal with as few of these hoops as possible. We have a life.

We experienced how these hoops can take over your life our first year here and it’s a dark place neither of us want to revisit.

Arriving in the Netherlands we met with representatives from a company of international accountants. Let’s call them Delights. They would guide us through the ruthless waters of international tax, advising us on the best way to navigate between the Dutch and USA systems with as little stress as possible. We would pay them an exorbitant fee, but would be free from stress and the ravages of worry.

It was an interesting meeting. We felt we had missed the point entirely. Obviously our tax affairs were so straight forward the grey men didn’t feel there was much need for discussion. This was not what we expected from the Dutch at all. They are a measured nation, conservative, methodical and fair. Paperwork and documentation are a specialty. They are thorough, consistent, and dogged. You can trust the Dutch, and that’s a huge thing to say.

The Delightful accountants took months to prepare our return, weeks to respond to an email and if you phoned no-one had a clue who you were. The information on the Dutch return is required for the USA. We were months behind our schedule.

Finally Delights got back to us – our return was ready. There was no review, no recommendations. Their job was done. There had been no consultation with their own Delightful US tax expert, something we naively expected to be part of the process.

This was because Jacques, their US consultant, was operating out of Belgium and it was very difficult for him to be reached down there.

Interestingly enough I had no problem getting hold of him.

His advice was sound and professional. When I expressed concern over the poor level of service offered by his company in the Netherlands he was most helpful. I can’t repeat what he said due to libel laws, but we took his advice and engaged a competent company.

Meanwhile in Louisiana our wonderful CPA (Certified Public Accountant) was struggling to deal with everything in the aftermath of two hurricanes and a heart attack. She hadn’t been able to start work on our US return until Delights had filed theirs. She didn’t need the stress.

The final straw was receiving a phone call from her in a cardiac ward at the Louisiana Heart Hospital. By the time she’d worked her way through the complexities of our taxes and realised the amount of our tax liability in the US due to bad planning and delays, the paramedics were called. The effect was pretty similar on us too.

Neither the Captain nor I wanted a repeat of that dreadful time and started a search for the perfect tax preparation company.

We have found it. Two separate companies, one for Dutch taxes, one for US, both working in the same office, with the same staff.

We decided to take the initiative and headed off to interview them. We were the customer after all. We would lay our cards on the table and make it clear what our expectations were from a company we were trusting to act on our behalf, in our best interests.

I thought I’d died and gone to heaven. Of course they responded to emails the same day, of course they took phone calls personally, of course they dealt with the Belastingdienst in a timely manner. More importantly if we wanted a return completed and filed by the end of February of course it would be done. We were the customer. They were shocked our expectations we so low.

Hans and Constanze were the consummate professionals. Knowledgeable, smart, willing, engaged and great to talk with. Their office staff were friendly, smiling and courteous. By the time we left I was in love with them all. The Captain was a little more wary – they’d talked the talk but would they deliver?

Yes they did. It’s been wonderful to work with people who know what they are doing and who you can trust, without that nauseous feeling you get when you know you’re being screwed.

So why do I still have that awful feeling in January when I think about tax season?

Because we do not want a repeat of that awful first year – the issues from incorrect information submitted on that return were finally resolved with the Dutch authorities only last December.

Because having demanded and been given such high levels of service and commitment from our current accountants we have to deliver too. They can only do what we’ve asked them if we give them what they need to do it, which is why you’ll find me scrambling in January making sure all my files and paperwork are in order.

Anal I know, but this way our affairs are in order and we feel in control again.  I even have my first piece of documentation in my 2011 tax file…

 

About wordgeyser

Our anglo/american family used to live in four countries (USA, Canada, UK and the Netherlands) on two continents, separated by distance, time zones, circumstance and cultures. It has been a scary, enriching, challenging place to be. The only things guaranteed to get us through were a sense of humour and the amazing people met along the way. . . This year everything changed with a move for us from the Netherlands, – and a move along with us for our son and his wife from the UK – to Houston, Texas, the same city as our daughter. With our youngest in Vancouver, Canada, we are now all living on the same continent. How this happened, and more importantly why, will be the subject of this ongoing blog...
This entry was posted in Advice for New Arrivals in the Netherlands, Dutch Culture, Dutch Laws, Taxes and Bureaucracy, Expat Experiences and tagged , , , , , , , , , , . Bookmark the permalink.

3 Responses to Life’s Certainties: the Dutch and Taxes

  1. Cecilia Inness says:

    Oh Jane, only you could put that nightmare time into such a funny story. If we can’t share these trials and find some humour in it we really can’t go on at all.
    There is a perverseness in these agents that seem to cross all boundaries.

  2. I laughed too, but in sympathy. A few years ago we got into a major circular game with the IRS (amended return triggering adjustment in tax due, long story). A mini nightmare, and we weren’t even in trouble or audited. Woe to anyone who is!!

  3. Jane says:

    Just wiping away the tears from laughing… empathy/sympathy/reality…

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