Legal Question in Tax Law in Texas

Re: Non-resident alien for tax purposes

I have never know any foreign taxpayer who voluntarily sought to become subject to US income taxation other than as a consequence of becoming a US citizen or permanent resident. There must be something here that is not apparent from your query.

A non-US-taxpayer becomes treated as a US taxpayer ("USTP") if he satisfies one of the statutory bases for US tax jurisdiction. There are two tests based upon length of time spent within the US, the first being the number of days in a given calendar year, and the second being a weighted average of the past three years. Also, USTP status applies to lawful permanent residents (holders of so-called Green Cards) and US citizens.

The foregoing tests would not apparently be satisfied by the two Dutch residents that you describe.

The broader question is whether they would avoid whatever tax regime they apparently are seeking to leave behind. The US is highly unusual in its approach to taxation, in that virtually every other country does not tax based upon citizenship; rather, the test is one of "tax residence" or domicile. Thus, it is unlikely that a person whose habitual residence is in the Netherlands could avoid Netherlands taxation even if he managed to also become a USTP (e.g., by obtaining a Green Card or US citizenship).

If the business has branches both in the US and the Netherlands, then it would be possible to obtain an L-1 visa for an "intra-company transferee" that would permit executives from the Netherlands to live for up to seven years in the US. Further, unlike most "non-immigrant" visas, people in L-1 status are allowed to seek permanent resident status while in the US in L-1. By spending more than 183 days in the US, a person becomes presumptively a USTP.

Best wishes,

LDWG