UK national living in the Netherlands working for a US company

Hi and welcome to the Forum.

You mention, the USA, NL and UK; their are no 3-way tax treaties in existence and in general, none of them will permit you to pick and choose, they generally tell you that either you do or don't fall in their jurisdiction; unhelpfully, they don't tell you of any breaks you may be entitled to, they say that's up to you to claim, they will then say yes or no.  About now, if you have registered in the Netherlands and have a BSN number, a blue envelope will drop through your letter box, it's from the Belastingdienst and it's your Dutch tax return; I always advise people with complicated tax affairs to speak to a professional, so what follows are my thoughts; yours sound pretty complicated to me.

Regardless of who sent you (almost - some Government appointees are exempt), or where you live, taxation is always decided by where you are resident for the majority of the tax year.  Your nationality has nothing to do with your taxes.  That is unless you are a US citizen, where they have to file with the IRS every year.  But you're a British citizen, so the US has no claim over you or your affairs unless you live there, or have unfinished business from previous residency.

If you "moved to the US", then the NHS is not available to you, there is a requirement for you to be "resident" in the UK for you to be able to use its facilities.  You will need Health Insurance if you visit the UK.

The other thing to watch out for and this is where the 37% has come from (I think); these are for social taxes and these taxes do not form part of any tax treaty; in the Netherlands they are very expensive, but it pays for Old peoples care, pensions and the State part of the Health Service (although you still have to have Health Insurance on top of that).

So, what to do, my creative thought is you need to speak to an International tax advisor; how do you find them, top of this page is a link to our Services section, I'm sure their will be some in there.  I don't know any of them and the guy I used when I lived there has long since retired, but he helped, I still had to pay all the money they asked for, It didn't help when I got emotional and called the guy from the Belastingdienst all sorts of rude names, but I did feel better.

Hope this helps.

Cynic
Expat Team

Thank you for your response here and your insights into the tax system.

I talked to a tax advisor yesterday, and he advised me, which I will share below. Summary: I pay taxes in the US, and not that of the Netherlands for the first two years.


-------------

Only tax in the US for the first two years (maybe longer even)

Paragraph 1 of article 21 provides an exemption from tax in one State for an individual who visits that State for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, or other recognized educational institution in that State if the individual is a resident of the other Contracting State immediately before his visit begins.

The exemption applies to any remuneration for such teaching or research. The exemption from tax applies for a period not exceeding two years from the date he first visits the Contracting State (the "host State") for the purpose of teaching or engaging in research at a university, college, or other recognized educational institution there. If a professor or teacher remains in the host State for more than the specified two-year period, he may be subject to tax in that State, under its law, for the entire period of his presence. However, if the competent authorities so agree in a particular case, the exemption may apply for two years even if the individual's stay exceeds two years. It is anticipated that the competent authorities would agree to such an extension only in cases where the departure of the individual is delayed beyond the end of the two-year period because of unforeseen circumstances.

The host State exemption will apply if the teaching or research is carried on at an accredited university, college, school, or other recognized educational institution.
Only if the research is in the public interest

Paragraph 2 provides that Article 21 shall apply to income from research only if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other private person or persons.

Some further general info
As stated in paragraph 3 of Article 22 (Students and Trainees), an individual may not claim the benefits of this Article if, during the immediately preceding period, he has claimed the benefits of

Article 22.
There is no provision in the U.S. or OECD Models dealing with professors and teachers. It is not standard U.S. treaty policy to provide benefits to visiting teachers by treaty. It is included in the Convention because a similar provision is found in the prior Convention. Under the prior Convention, however, the exemption applied for two years even if the individual's stay exceeded a two-year duration.

Under paragraph 2(b) of Article 24 (Basis of Taxation), the saving clause (paragraph 1 of Article 24) does not apply to the benefits conferred by one of the States under Article 21 if the recipient of the benefits is neither a citizen of that State, nor, in the case of the United States, is a lawful permanent resident (i.e., a "green card" holder). Thus, a Netherlands resident who visits the United States for two academic years as a professor and becomes a U.S. resident according to the Code, other than by virtue of acquiring a green card, would continue to be exempt from U.S. tax in accordance with this Article so long as he is not a U.S. citizen and does not acquire immigrant status in the United States. The saving clause does apply to U.S. citizens and immigrants.
What should we conclude?

I did see the 'to whom it may concern' letter written by Carlo Ratti and dated July 1, 2020, and he writes that Tom is seconded to Amsterdam to work on a research project, a joint project between MIT and the UVA, so Tom one needs to conclude that Tom is only subject to tax in the US for the first two years.

Anything else? Yes and being social securities

Under the social security treaty as concluded between the US and NL Tom remains insured in the US.

I need to check the relevant document that needs to be signed for by the authorities in the US and NL.

Anything else? Does Tom need to file an NL individual income tax return in the NL?

Thank you - informative.

As to the tax return; if Tom is registered at the Gemeente and has a BSN number and then gets the blue envelope, my advice would be for Tom to speak to the same tax advisor who provided the above detail; not only can he/she help fill in the form, but they are excellent at pointing out the things you can claim to offset any tax liability.

Hope this helps.

Cynic
Expat Team