Rest of the world Specific

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Belgian "Epargne-Pension" Reporting

Growth in this plan is not reportable and not taxable to the U.S.person participating in the plan  until distributions from the plan are made.

US/Belgian Tax Treaty

Article 17(6):

Income earned by a pension fund that is a resident of a Contracting State may be taxed as income of an individual who is a resident of the other Contracting State only when, and, subject to the provisions of paragraph 1 of this Article,  to the extent that, it is paid to, or for the benefit of, that individual from the pension fund (and not transferred to another pension fund that is a resident of the first-mentioned Contracting State

Article 1(5): Exemption from Saving Clause

The provisions of paragraph 4 shall not affect: ... paragraphs 1 b), 2, 5,  6 and 9 of Article 17 (Pensions, Social Security, Annuities, Alimony, and Child Support)

The takeaway

Belgian Epargne-Pension (Pension Saving Plan) is an  IRS-qualified plan.

Canadian Income Reporting

RRSP & TFSA on U.S. tax return

Yes, you have to report these accounts.

FBAR (FinCEN 114) and FATCA (Form 8938)

Provide details for both RRSP & TFSA accounts on the Non-US Financial Accounts > Accounts List tab.

Income Reporting on Form 1040

RRSP - earnings in the account do not need to be reported by US/Canada Tax Treaty. 
However, TFSA earnings in the account must be reported on the U.S. tax return

Income deferral is allowed only for the Canadian Registered Retirement plans. TFSA is a Canadian tax-free saving account that is not tax-free in the US. 

To list TFSA income, add the amounts earned in the calendar year inside Income > Passive Income > Interest tab

FYI: this is similar to  UK SIPP vs ISA. SIPP is IRS-qualified retirement account with deferral allowed. ISA is the individual saving account with tax deferral in the UK but not in the US

Dutch Tax Glossary

Dutch Tax Statement English Translation
Loon LB/PH The wage for taxes and national insurance contribution
Ingehouden LB/PH Wage taxes and national insurance contribution withheld
Verrekende arbeidskorting Settled labor discount
Loon Zvw The wage for premium health care Insurance
Werknemersbijdrage Zvw Employees contribution to health care insurance
Werkgeversheffing Zvw Employers contribution to health care insurance
Verr. Levenslooopverlofkorting Settled life-course savings
WG bijdrage SV Employers contribution to social security

Totaal Inkomsten Ult Werk En Woning

Gross Salary - Report the total amount of the annual Gross Salary in  Income > Wages > Income Outside of the U.S. section of our Tax Questionnaire.

Premie Volksverzekeringen

All Dutch residents must contribute to the country’s social security scheme.A totalization agreement is in place between the Netherlands and the United States, which gives some guidance about which country the social security taxes must be submitted to. Generally, if a taxpayer is sent to the Netherlands to work by a US company for under 5 years, they pay taxes into the United States Social Security system. If a taxpayer is hired within the Netherlands, is recruited to work by a company in the Netherlands, or is planning to work within the Netherlands longer than 5 years, they pay into the Dutch system.

Because your country has a Totalization Agreement with the US, you do not have to report the amount you paid into the local Social Security system in the tax questionnaire.

Totaal Inkomstenbelasting

This amount represents the total tax assessed on your taxable income. Report this tax in the  Taxes & Deductions > Taxes Paid tab of the Tax Questionnaire (TQ).

As stated below, the TQ offers two options, one to use tax assessed for the foreign tax credit, or simply use the amount for tax actually paid. While in the TQ, please click the corresponding help link (green question mark) for further detail.

Ingehouden Loonheffing

Income Tax - Amount of foreign income tax paid or withheld. Can be utilized as a foreign tax credit to offset U.S. tax liability. Report tax imposed on the particular income type in the same section of our Tax Questionnaire where you reported that income.

Dutch Businesses & Investments

Opening a local business in the Netherlands as a US citizen

Of course, before opening a local business in the Netherlands, you must have the right to live and work in the Netherlands. You will need to apply for a residence permit (MVV) and in some cases a work permit (TWV). What’s more, you must decide on your business structure, a vital decision which determines the liability of your business debts and tax obligations.

What types of local business structures are there in the Netherlands, and what would be the US filing requirement?

The Netherlands has several types of business structures which are divided into two groups including the Unincorporated business structures (no legal form required) and the Incorporated business structures (legal form required).

Unincorporated Business Structures (Rechtvormen zonder rechtspersoonlijkheid)

Unincorporated Dutch business structures include Eenmanszaak: sole trader, Vennootschap onder firma (VOF), Maatschap, and Commanditaire vennootschap (CV). These unincorporated businesses can be registered directly with the Dutch Chamber of Commerce (KvK) without a notarial contract.

Sole Trader (Eenmanszaak)

As a Sole Trader, you are self-employed. You will need to report your self-employment to the IRS via form Schedule C.

VOF, Maatschap, and CV

Expats planning to go into business with one or more people may decide to register their business as a partnership. In the Netherlands there are various types of partnerships including Vennootschap Onder Firma (VOF): general partnership, Maatschap: professional partnership, Commanditaire Vennootschap (CV): limited partnership. You will be required to report the aforementioned partnerships to the IRS via Form 8865.

Incorporated business structures (Rechtvormen Met Rechtspersoonlijkheid)

Incorporated Dutch business structures include Besloten vennootschap (BV): private limited company, Naamloze vennootschap (NV): public limited company, Stichting: foundation, and Coöperatie: cooperative or collective.

These incorporated businesses can be registered directly with the Dutch Chamber of Commerce (KvK) and require a notarial contract. You will be required to report the aforementioned corporations to the IRS via Form 5471.

Your pension in the Netherlands

Pension Structures: The Dutch pension system is made up of three pillars.

  • Pillar I: The state or AOW pension (basispensioen) is an insurance scheme which covers everyone who lives or works in the Netherlands, regardless of nationality. In addition to surviving partner pension and specific health costs, your Dutch social security contribution is considered as coverage for state pension.
  • Pillar II: Collective pension funds are collective or private schemes connected to a specific industry or company. Employer contributions will not be included in current year taxable income. (Exempt by tax treaty.)
  • Pillar III: Individual pension funds or supplements make up the third pillar. Pillar III is mostly used by self-employed individuals and employees in industries with no collective pension funds. Individual pension products may include life insurance, shares, or property.

Dutch Financial Accounts

Which types of Dutch financial accounts the U.S. individual must report on FBAR/FATCA?

  • Individual bank accounts such as savings accounts, checking accounts, and time deposits.
  • Retirement accounts - balance on Pillar 2 and Pillar 3 accounts
  • Brokerage accounts, commodity futures or options accounts,
  • Insurance policies and annuity contracts with a cash value (i.e. such as a whole life insurance policy).
  • Business accounts where U.S person has a greater than 50 percent interest in the entity

Which types of Dutch financial assets are not required to be reported on FBAR/FATCA?

  • Social Insurance,
  • Real Estate Holding,
  • Precious metals held directly,
  • Collectibles,
  • Financial Account held at a US branch of a foreign financial institution.

Kingdom of Saudi Arabia (KSA) Tax Glossary

The Wage Protection System (WPS)

In 2016, Saudi Arabia’s Minister of Labor announced that all companies with at least 10 employees must process payments and reporting electronically via the Wage Protection System.  

WPS Template

Salary Slip

Wage Statement - If you are employed in Saudi Arabia you will likely receive payment via direct deposit as well as a salary slip provided by your employer via the Wage Protection System.

Beneficiary Basic Salary

Gross Salary - Report the total amount of the annual Gross Salary in the  Income > Wages > Income Outside of the U.S. section.

Housing Allowance

Housing Allowance is an allowance provided by your employer on top of your direct salary. Please include this in the Tax Questionnaire under  Income > Wages > Income Outside of the U.S. section.

Transportation Allowance

Transportation Allowance is an allowance provided by your employer on top of your direct salary. Please include this in the Tax Questionnaire under  Income > Wages > Income Outside of the U.S. section.

Overtime

Overtime pay received should be added to your gross wage amount in the  Income > Wages > Income Outside of the U.S. section.

Bonus

Bonus pay received should be added to your gross wage amount in the  Income > Wages > Income Outside of the U.S. section.

Kingdom of Saudi Arabia (KSA) Business and Investments

Opening a local business in KSA as a US citizen

Before establishing any type of business structure in Saudi Arabia, you must obtain an investment license from the Saudi Arabia General Investment Authority (SAGIA) under the Foreign Investment Regulations. In addition, you may need to obtain pre-approval from the appropriate Ministry before receiving your SAGIA license.

Of course, you will need to decide on your business structure. Saudi Arabia generally allows foreign investors to operate through the five forms of business including Commercial Agencies, Limited Liability Companies (LLC), Joint Stock Companies, Foreign Office Branch, Technical and Scientific Offices (Representative Offices). However, the most common business structures for expats are limited liability companies and foreign office branch.

Limited Liability Companies (LLC) or Saudi Limited Liability Company

The Saudi LLC is a private entity ranging from two to fifty members who are liable for the company’s debts to the extent of their contributed capital. The amount of contributed capital must be at least SAR 500,000.

Depending on the industry of the LLC, expats (or foreign investors) can wholly own this type of company without the requirement of the directors being a Saudi Arabian National. You will need to report your Limited Liability Company to the IRS via Form 5471.

Foreign Office Branch

Expat Companies can set up a branch office in KSA which may carry out trading activities. The parent company would assume 100% of the branch office’s debts. The branch office is subject to Foreign Investment Law and the regulator authority Ministry of Commerce and Industry (MOCI). You will need to report your Foreign Office Branch to the IRS via Form 5471.

The Stock Market

The stock market in KSA is called Tadawul. Although it is uncommon for expats in KSA to open a trading account, expats working in Saudi Arabia are the only category of foreign investors allowed to invest in the Saudi stock market. You will need to report your capital gains and dividend income in the tax questionnaire within the Passive Income section.

Saudi Arabian Social Security

Saudi Arabia’s social security system applies to the private sector as well as some public workers. Individuals who do not qualify for mandatory coverage in SA, have a voluntary option for coverage. Saudi social security is funded with a pension that taxes 9% of the insured person’s  earnings (gross) in addition to the employer’s contribution (9% of payroll). The self-employed pay 18%.

Saudi Arabia does not have a Totalization Agreement with the US. Therefore self-employed expats must contribute to US Social Security regardless of whether they contribute in SA or not.

Saudi Arabian Financial Accounts

Which types of KSA financial accounts the U.S. individual must report on FBAR / FATCA?

  • Individual bank accounts such as savings accounts, checking accounts, and time deposits.
  • Brokerage accounts, commodity futures or options accounts,
  • Insurance policies and annuity contracts with a cash value (i.e. such as a whole life insurance policy).
  • Business accounts where U.S person has a greater than 50 percent interest in the entity

Which types of KSA financial assets are not required to be reported on FBAR / FATCA?

  • Social Insurance,
  • Real Estate Holding,
  • Precious metals held directly,
  • Collectibles,

Financial Account held at a US branch of a foreign financial institution.

Norvegian Aksjesparekonto - stock savings account ISA

Tax-Deferred saving & Investment accounts in Norway do not qualify for income deferral in the US Income earned on those accounts must be reported on U.S. tax returns.

Report interest earned on Income > Passive Income > Interest tab of our Tax Questionnaire (select Foreign interest income).

Report dividends on  Income > Passive Income > Dividends tab (select Non-US Dividends).

NZ Personal Tax Summary & Income Reporting

How to Read New Zealand Personal Tax Summary

Your Personal Tax Statement (PTS) indicates your income and the amount of tax withheld by your employer.

Income from salary, wages, benefits or taxable pensions

Gross Salary - Report the total amount of the annual Gross Salary in Income > Wages > Income Outside of the U.S. section of our Tax Questionnaire. 

Income from interest and dividends and taxable Māori authority distributions

Dividends paid - Report dividends on   Income > Passive Income > Dividends tab (select Foreign Dividends).

Interest income - The simplest kind of interest is if you have a bank account - the bank will pay you some percent for the privilege of holding your money. 

Report interest earned on   Income > Passive Income >Interest tab of our Tax Questionnaire (select foreign interest income).

Tax on taxable income

This amount represents the total tax assessed on your taxable income. Report this tax in the Taxes & Deductions > Taxes Paid section of the Tax Questionnaire (TQ).

As stated below, the TQ offers two options, one to use tax assessed for the foreign tax credit, or simply use the amount for tax actually paid. While in the TQ, please click the corresponding help link (green question-mark) for further detail. 

Total tax paid

Income Tax - Amount of foreign income tax paid or withheld. Can be utilized as a foreign tax credit to offset U.S. tax liability. Report tax imposed on the particular income type in the same section of our Tax Questionnaire where you reported that income.

How do I calculate the % of income tax paid in NZ that goes towards their equivalent of social security?

It is shown on your paystub as employee KiwiSaver deductions.

NZ Businesses & Investments

Opening a local business in New Zealand as a US citizen

Of course, before opening a local business in New Zealand, you must obtain the appropriate visa to obtain the right to live and work in New Zealand. Also, you must decide on your business structure, a vital decision which determines the liability of your business debts and tax obligations.

What’s more, you will need to contact the agencies in charge of registration and issuing license to businesses in New Zealand. The agencies include Inland Revenue, The Companies Office, and Regional Council. For tax purposes, all business must register with Inland Revenue. The Companies Office is the New Zealand government agency responsible for corporate body registers. Before opening your business, the appropriate licenses and permits must be obtained from The Regional Council.

What types of local business structures are there in New Zealand, and what would be the US filing requirement?

Business in New Zealand generally use one of three business structures including sole trader, partnership, and limited liability company.  

Sole Trader

A sole trader is a business run by a single owner who possesses full control and assumes personal responsibility of the company’s liabilities. As a sole trader, you are self-employed. You will need to report your self-employment to the IRS via form Schedule C.

Partnership

Expats planning to go into business with one or more people may decide to register their business as a partnership. The partnership business structure can be an effective way to share business operation costs. You will be required to report the partnership to the IRS via Form 8865.

Limited Liability Company (LLC)

The limited liability company is the most common amongst expats, as the LLC offers better protection than the sole trader and partnership business structures. The LLC is a formal and legal entity separate from its owners or shareholders. The LLC’s shareholders’ are only liable for losses up to the amount of their share of ownership in the company. You will be required to report your LLC to the IRS via Form 5471.

The New Zealand Stock Exchange (NZX)

There are over 200 companies listed on the New Zealand Stock Exchange (NZX).  Expats may decide to buy shares of these publicly listed companies traded on the NZX. Expats also have an option of buying shares of private companies not listed on the NZX. Of course, expats planning on investing will need the appropriate visas.

Investments on the NZX can be made directly through an NZX broker. When buying shares of private companies, an investor should consult a business broker or a legal/financial professional. For tax purposes, you will need to retrieve a statement from your broker detailing all stocks and securities purchased or sold during the year. The statement should outline the purchase price, transaction fee, purchase/sale date (as these details are relevant to your tax return).

New Zealand Bonds

New Zealand offers a range of fixed-interest bonds which can be purchased through investment advisers, share brokers, and the NZX Debt Market (NZDX). The NZDX Market also provides a secondary market where investors can buy and sell debt securities such as corporate bonds and government securities (i.e. Kiwi Bonds). Kiwi Bonds are only offered to New Zealand Residents. Even if New Zealand citizenship is held, the investor is ineligible if he or she resides outside of New Zealand. Any information regarding income generated through interest or dividends should be provided to your tax preparer.

Social Security and Pensions

New Zealand has a three-pillar pensions system. The first pillar holds the New Zealand Superannuation or NZS (social security), which is a non-contributory state pension. The purpose of NZS is to provide social security to all residents fulfilling the residence requirements at the age of 65. The second pillar holds the occupational superannuation schemes and the KiwiSaver scheme. The KiwiSaver scheme is a voluntary, work-based scheme with the primary objective to compliment and increase overall retirement savings. Contributions to the KiwiSaver scheme are voluntary for employees and employers. In addition to paying ongoing account fees, the government contributes NZD 1000 to the KiwiSaver upfront.

The third pillar consists of private-sector occupational schemes, which are provided through registered or unregistered superannuation schemes. The occupational schemes are provided on a stand-alone basis or as part of a master trust. 

New Zealand Financial Accounts

You may meet the filing requirement to disclose your foreign accounts on FBAR if you have bank accounts at Commonwealth Bank (CBA), Westpac, National Australia Bank, Australia and New Zealand Banking Group (ANZ) or at another bank in New Zealand or any other foreign country.

Which types of New Zealand financial accounts must the U.S. individual report on FBAR / FATCA?

  • Individual bank accounts such as savings accounts, checking accounts, and time deposits.
  • Retirement accounts.
  • Brokerage accounts, commodity futures or options accounts.
  • Insurance policies and annuity contracts with a cash value (i.e. such as a whole life insurance policy).
  • Business accounts where U.S person has a greater than 50 percent interest in the entity.

Which types of New Zealand financial assets are not required to be reported on FBAR / FATCA?

  • Social Insurance,
  • Real Estate Holding,
  • Precious metals held directly,
  • Collectibles,
  • Financial Account held at a US branch of a foreign financial institution.
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