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December 18, 2013: Netherlands FATCA Intergovernmental Agreement

Foreign Account Tax Compliance Act (FATCA)


The Netherlands and the U.S. sign Intergovernmental Agreement and Memorandum of Understanding

On December 18, 2013, the Netherlands and the U.S. signed an Intergovernmental Agreement (“IGA”) to improve international tax compliance with respect to FATCA. Despite the fact that the agreement was not based on the Model 1A Reciprocal IGA released on November 4th, 2013, it does introduce certain provisions to the Model 1 agreements signed by other European countries.(e.g. new sections and provisions in Annex 1 and 2). The Netherlands IGA also includes the FATCA deadlines that are consistent with Notice 2013-43.

There are a few items that should be noted:

  • According to Article 2 and 3, the U.S. is committing to create rules to require both the collection and reporting of Netherlands taxpayer identification numbers and the date of birth (if Netherlands TIN has not been assigned) for residents of the Netherlands.
  • Article 5 related to the collaboration on compliance and enforcement requires compulsory notification when a competent authority has detected administrative errors or other minor errors. There will not be direct inquiries made to the Reporting Financial Institution.
  • Under Annex I (related to Due Diligence obligations), the main provisions that have been incorporated are:
    • Financial institutions in the Netherlands may elect to apply the due diligence procedures described in the U.S. Regulations separately for each clearly identified group of accounts. This ability to elect is also permitted in relation to other options available in Annex I (for example, in relation to the application of optional thresholds)
    • Consistent with the German and French IGAs with the U.S., a credit card or a revolving credit facility treated as a new entity account is not required to be reviewed, identified, or reported, provided that the Reporting Netherlands Financial Institution maintaining such account implements policies and procedures to prevent an account balance owed to the Account Holder that exceeds $50,000

Annex II of the agreement identifies Netherlands governmental entities1, the Central Bank of the Netherlands (De Nederlandsche Bank N.V.), certain international organizations in the Netherlands, certain retirement and pension funds2 in the Netherlands, and Netherlands investment entities wholly owned by exempt beneficial owners as exempt beneficial owners. The categories of deemed-compliant entities under Annex II include certain small financial institutions with a Netherlands client base, certain non-profit organizations, certain funds exempt under the Corporation Tax Act and constituted by a Netherlands labor union, certain investment advisors and investment managers to the extent they do not hold client funds, and certain investment vehicles regulated under the laws of the Netherlands (with specific rules). Lastly, Annex II declares that certain accounts or products may be treated as exempt including certain alimony annuities, certain funeral insurance policies, certain retirement products and certain other tax favored accounts and products.

As with certain other jurisdictions in the past, the Netherlands IGA included a Memorandum of Understanding (“MOU”) to clarify certain aspects of the IGA. Some highlights in the memo included the following clarifications:

  • A Netherlands resident is defined in Article 4 of the General Tax Act;
  • With respect to the definitions in Article 1:
    • A Fund for Mutual Account is a legal arrangement;
    • A Stichting Administratiekantoor (STAK) in the Netherlands is treated as an NFFE (if regularly traded on an established securities marked it is an Active NFFE otherwise it is Passive);
    • Certain depositories are not considered financial accounts;
    • An account held by a foundation serving solely as an escrow for a debt or purchase obligation of the transferor of the assets to the foundation is not considered a U.S. Reportable account or an account held by a non-participating FFI;
    • The NYSE Euronext Amsterdam is an established securities market.
    • Paragraph 7 of Article 4 of the Agreement applies to all definitions in Article 1 of the agreement; and 
  • Nothing in the Agreement will obligate an entity in the Netherlands to report directly to the U.S. Internal Revenue Service if the option is possible in future U.S. Treasury Regulations if such reporting is contrary to Netherlands’ law.

Full article and U.S. Department of the Treasury’s announcement are available for download. For more information please contact a Deloitte FATCA Leader or click here.

As used in this document, “Deloitte” means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


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