How is my US 401(k) or IRA taxed once I live in the Netherlands?
Short answer: For a Dutch resident, a US 401(k) or traditional IRA is generally treated as a pension right under the US–Netherlands tax treaty. It is usually kept out of Box 3 while invested, and withdrawals are taxed in the Netherlands as Box 1 income at progressive rates. Roth accounts and lump-sum withdrawals need specific review.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-06.
Why it works this way
The treaty generally gives the country of residence the right to tax periodic pension payments. Because the account is treated as a pension, annual Box 3 tax on its value normally does not apply — an important difference from a taxable brokerage account.
The US may still withhold on distributions to non-residents. Filing Form W-8BEN with the plan and claiming treaty benefits is how you avoid paying tax twice, and the order in which each country claims tax affects which one gives the credit.
Roth accounts are less clear: the Netherlands does not have an equivalent, and tax-free treatment in the US does not guarantee tax-free treatment in the Netherlands. This is a question for a Dutch tax adviser before large Roth withdrawals.
The expensive mistake: Cashing out the 401(k) before leaving to 'simplify'
An early withdrawal before age 59½ triggers US income tax plus a 10% penalty, and you lose the tax-deferred growth that the treaty would have protected.
What to do
- Keep the plan, update the paperwork — Confirm the plan administrator accepts a foreign address and file a W-8BEN.
- Plan withdrawals around Box 1 brackets — Spread withdrawals across years to stay in lower Dutch brackets where possible.
- Get a view on any Roth — Ask a Dutch adviser how Roth growth will be treated before you draw on it.