How Is Your US LLC Taxed in the Netherlands?

Your LLC is taxed differently in the Netherlands versus the US. The LLC is considered a pass-through entity in the US. Therefore, the income is taxed to the owner or owners and not at the entity level.

The Netherlands has its own rules, and they’re not like the U.S.

Since 2025, In the Netherlands, a US LLC will be treated as an entity similar to a Dutch BV. So this change would imply that the Netherlands considers your LLC as a separate company. It will not be treated like a transparent company in the US, so you should be aware of the difference because you can be taxed twice on the same income.

Does the Netherlands treat my US LLC as a pass-through?

Not necessarily.

Suppose you own a US LLC together with your spouse. The LLC is taxed as a partnership in the US, files Form 1065 and issues K-1s to both of you.

You might expect the Netherlands to follow the same treatment.

It generally does not.

Under the Dutch entity-classification rules introduced in 2025, foreign entities are compared with Dutch legal forms. A standard US LLC is generally considered comparable to a Dutch BV or NV.

The Dutch starting point is therefore that the LLC is non-transparent.

Put simply:

The US may look through the LLC. The Netherlands may see a separate company.

Your US tax election does not automatically determine the Dutch treatment.

Can this result in double taxation?

Yes, it can.

Say for example an LLC earns $100,000.

If the LLC is taxed as a partnership in the US, then the income flows out to the owners. You claim your share on your U.S. tax return even if the money stays in the LLC.

The Netherlands may view this differently.

The LLC may earn income in the Netherlands if it is treated as a separate company. Dutch taxation at the shareholder level may then arise at a different moment, such as when the LLC makes a distribution.

This creates a US-Dutch tax mismatch.

It does not automatically mean that the same income will be taxed twice. The US-Netherlands tax treaty and the applicable double-tax relief rules also need to be considered.

However, relief can become more complicated when the US and the Netherlands attribute the same income to different taxpayers.

This is one of the main reasons to review an existing US LLC before becoming a Dutch tax resident.

Is my US LLC taxed in Box 2 or Box 3?

Americans moving to the Netherlands often hear about Box 3 and assume that their LLC interest will simply become another Box 3 investment.

That may not be the case.

If the Netherlands treats your LLC as a separate company and you own at least 5%, the interest may qualify as a substantial interest for Dutch tax purposes.

This generally places the LLC interest in Box 2 rather than Box 3.

The distinction is important.

Box 3 generally applies to personally held savings and investments.

Box 2 applies to significant interests in companies. Among other things, distributions from the company and gains on the sale of the interest can be taxable in Box 2.

For an American who owns 50% or 100% of an LLC, determining the Dutch classification of the LLC should therefore come before calculating any Box 3 exposure.

Leaving profits inside the LLC does not necessarily create immediate Box 2 income. But distributions from the LLC can have Dutch tax consequences. The treatment depends on the nature of the payment and the circumstances.

What if my LLC owns US real estate?

US real estate adds another layer.

Suppose your LLC owns rental property in the United States.

The US may treat the LLC as transparent and tax the rental income directly to you.

In the Netherlands the LLC is the owner of the real estate as it is treated as a separate entity.

The US-Netherlands tax treaty contains specific rules for income and gains from real estate. But when the two countries classify the entity that holds the property differently, this could be an issue.

This does not mean that US real estate will automatically be taxed twice.

It does mean that you should not simply assume:

“The property is in the US, so the Netherlands cannot tax anything.”

The ownership structure matters.

What happens to my US savings and investments?

For Americans with substantial assets, the LLC is often only one part of the Dutch tax question.

Cash, stocks, ETFs, and other investments that you hold personally can generally fall within the Dutch Box 3 regime once you become a Dutch tax resident.

It does not matter that the bank or brokerage account remains in the United States.

For example, someone moving to the Netherlands with an LLC, US real estate and a $1 million personal investment portfolio may have two very different Dutch tax issues:

the LLC interest may fall within Box 2; while

the personally held cash and investments may fall within Box 3.

This is why I prefer to look at the person's complete financial structure before the move rather than considering the LLC in isolation.

The first question should be:

What will my Dutch tax position look like if I move and change nothing?

Once you know that, you have a baseline against which potential planning alternatives can be compared.

Should I restructure my LLC before moving?

Possibly, but restructuring should not be the starting point.

A structure that appears attractive from a Dutch perspective can have unfavorable US tax consequences.

Changing the US tax classification of an LLC, transferring investments to an entity or changing ownership can all have consequences in the United States.

There is also the question of where the LLC is actually managed.

If you move to the Netherlands and start making all important business, investment and financing decisions from your home in the Netherlands, this can raise questions about the Dutch tax position of the LLC itself.

Simply having a US LLC or appointing someone in the US does not necessarily resolve this. The actual facts matter.

For that reason, I generally approach pre-migration planning in three steps.

1. Calculate the current position

What would you expect to pay in Dutch tax if you move with your current LLC, investments and other assets?

2. Compare realistic alternatives

Could a different structure improve the Dutch tax position? What would it change, and is the potential benefit large enough to justify the restructuring?

3. Check the US consequences

Before implementing anything, the proposed structure should be reviewed with your US CPA.

The goal is not to create the most complicated structure possible. Sometimes the best advice is to leave the existing structure in place.

The goal is to make that decision before you move rather than discovering the consequences afterwards.

What should I review before moving to the Netherlands?

If you own a US LLC, significant investments, or US real estate, I would want answers to the following questions before becoming a Dutch tax resident:

• How will the Netherlands classify my LLC?

• Will my LLC interest fall within Box 2?

• How will LLC distributions be taxed?

• Is there a risk of US-Dutch double taxation?

• How will US real estate held through the LLC be treated?

• How much Box 3 exposure will I have on cash and investments I hold personally?

• Are there practical structuring opportunities before I move?

• What are the US consequences of those options?

• What needs to be implemented before Dutch tax residence begins?

For US citizens, the last part is particularly important.

Your Dutch tax adviser and US CPA should work together. A Dutch solution is only useful if it does not create a larger problem in the United States.

You should not have to coordinate two completely separate pieces of advice yourself.

Moving to the Netherlands with a US LLC?

Timing matters.

If you already live in the Netherlands, your structure can still be reviewed. But if you are still planning your move, there may be more options available before Dutch tax residence begins.

At TaxDoctor, I help Americans moving to the Netherlands understand how their US LLCs, real estate, and investment assets will be treated for Dutch tax purposes.

The process starts with a simple question:

What happens if you move to the Netherlands and change nothing?

From there, we can calculate your expected Dutch tax exposure, identify relevant planning alternatives and coordinate any proposed changes with your US CPA.

The objective is straightforward: before you move, you know what your expected Dutch tax position is, whether restructuring is worthwhile, and what needs to be done.

Planning a move from the US to the Netherlands?

If you own a US LLC, real estate, or significant investment assets, it can be useful to review your Dutch tax position before you move.

Schedule a US–Netherlands pre-migration tax consultation with TaxDoctor, or read more about our services for US expats.