Do You Still Pay US Self-Employment Tax on a DAFT Visa?

Usually not, once you live in the Netherlands. The US-Netherlands Social Security Agreement covers self-employed people only where they reside. A DAFT ZZP'er pays Dutch premiums (27.65% on the first €38,883 in 2026) and skips 15.3% US self-employment tax by attaching an SVB certificate of coverage to Form 1040.

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The catch: the exemption isn't automatic. The IRS doesn't know you moved your business to Utrecht. You prove it with a piece of paper from a Dutch agency, every year you claim it. And the foreign earned income exclusion, the tool most Americans abroad reach for first, doesn't touch self-employment tax at all.

Here's how the two systems fit together, and the paperwork that keeps you from paying into both.

Why Would a DAFT Entrepreneur Owe US Self-Employment Tax at All?

Because the US taxes its citizens wherever they live. The IRS says the self-employment tax rules are "generally the same" whether you're in the United States or abroad. Once your net earnings from self-employment hit $400, you owe it.

For a DAFT holder, that net profit is the point. The treaty only lets you work for yourself, so nearly all your income is self-employment income. Your 1099 clients back home, your Dutch clients and your one-person consultancy registered at the KvK (Kamer van Koophandel) all count.

Here's what that tax looks like on a US return in 2026:

On $60,000 of net profit, that's roughly $8,478 before you've paid a cent of income tax. That's the number people on DAFT forums are really asking about.

Does the Foreign Earned Income Exclusion Remove Self-Employment Tax?

No. This is the single most common misunderstanding. The IRS is explicit: you must count all your self-employment income when you figure net earnings from self-employment, "even if all, or a portion of, gross income was excluded because of the foreign earned income exclusion."

Form 2555 (the FEIE) can wipe out your US income tax on Dutch-earned profit. It does nothing for the 15.3%. If you remember one thing from this post, make it that. Our guide to US expat taxes, FEIE and FBAR covers how the exclusion works on the income tax side.

The foreign tax credit doesn't rescue you here either. The IRS lists "social security taxes paid or accrued to a foreign country with which the United States has a social security agreement" among foreign taxes you cannot claim a credit for. Dutch social premiums covered by the agreement don't offset US tax. The fix is the agreement itself.

What Does the US-Netherlands Totalization Agreement Actually Say?

It assigns you to one system, not two. The agreement has been in effect since November 1, 1990. According to the Social Security Administration, it "eliminates dual Social Security coverage and taxation of the same work."

For self-employed people, the SSA's operations manual (POMS RS 02001.625) sets out the rule. When your activity counts as self-employment in both countries, you are "covered only by the country of which he or she is a resident."

For a DAFT holder, that plays out like this:

That last row is the one that surprises people. Keeping your US clients doesn't keep you in the US system. The rule looks at residence, not at your invoice addresses.

In your move year, the picture is less tidy. Because coverage follows residence, self-employment before your move generally stays under US coverage and self-employment after you became Dutch resident falls under Dutch coverage. How that split is shown on a move-year return depends on the dates on your certificate, so have a cross-border tax adviser prepare it.

The agreement also works in your favor later. It lets periods in both systems count together toward partial US or Dutch benefits, even if you'd fall short of the normal insured status requirements in one country alone. Your Dutch years aren't a gap in your working life. They're a different column in the same ledger.

What Do You Pay in the Netherlands Instead?

Dutch national insurance premiums, collected through your income tax return. There's no separate social security bill. The government's business portal puts it simply: self-employed professionals "pay national insurance contributions as part of your income tax."

These are the volksverzekeringen, the national insurance schemes that cover everyone who lives in the Netherlands:

• AOW (Algemene Ouderdomswet), the state pension
• Anw (Algemene nabestaandenwet), survivor's benefit
• Wlz (Wet langdurige zorg), long-term care for chronic illness or serious disability

On top of that, ZZP'ers pay an income-dependent health care contribution, the bijdrage Zvw, by separate assessment. It sits alongside the health insurance premium you pay your insurer; it doesn't replace it.

Those premiums are baked into Box 1. The first bracket's 35.75% rate is 8.10% income tax plus the 27.65% in premiums. Above €38,883 you pay 37.56% up to €78,426, then 49.50%. The premium portion stops at the first bracket ceiling. Your Dutch accountant sees one number; you now know what's inside it.

For how deductions like the zelfstandigenaftrek change your taxable profit before these rates apply, see our breakdown of the 2026 zelfstandigenaftrek cut.

Here's the honest reframe. You're not escaping one tax to get hit by another. You're paying into the system you actually live in, the one that covers your long-term care and builds your Dutch state pension while you bike to the market on Saturday morning. The 15.3% you used to send to Washington now goes to the country your kids are growing up in.

One thing ZZP'ers don't get: the employee insurances. Self-employed people don't pay into unemployment or work disability schemes (WW, WIA), and business.gov.nl notes you have to arrange that cover yourself if you want it.

How Do You Get the SVB Certificate of Coverage?

You request it from the Sociale Verzekeringsbank (SVB). Despite the name, it's not a bank; it's the Dutch agency that runs AOW and the international coverage paperwork. The US-Netherlands certificate of coverage is form NL/USA 101 (the SVB's English site lists it with its A1 certificate of coverage pages), and it's the document the IRS expects.

The SSA's procedure manual (POMS RS 02001.645) says a request should give your full name, your Dutch social security number (BSN), citizenship, date and place of birth, country of permanent residence, your business address in both countries, and the start date (and end date, if known) of your self-employment. The agency sends back the original and a copy.

In practice, Americans Overseas reports that the standard SVB form is written for employees posted abroad, not residents running their own business. Self-employed applicants typically mark the employer sections "N/A, see attachment" and add a short written explanation. They include proof of their Dutch business activity, such as the KvK registration and VAT (btw) filings. Check svb.nl for the current application route (online or by form), or ask your Dutch accountant.

A sensible order of operations:

1. Register your business at the KvK (€85.15) and get your BSN. You need both to show you're a Dutch-resident entrepreneur.
2. Request the certificate from the SVB, with your self-employment start date matching the date your Dutch residence and business began.
3. Keep the original safe and store a scan with your US tax records.
4. Hand a copy to whoever prepares your 1040. A US preparer who hasn't seen a Dutch certificate before will need it in hand, not described in an email.

A certificate is valid for the date range printed on it. The IRS says to attach a copy to your Form 1040 each year you are exempt, so check the dates on yours and re-request before they run out. Taxes for Expats notes that retroactive certificates are possible in some cases but limited, so request it early rather than at filing time.

How Do You Claim the Exemption on Your US Return?

You attach the certificate and skip the SE tax calculation. The IRS Schedule SE instructions for tax year 2025 say: "Don't complete Schedule SE. Instead, attach a copy of the statement to Form 1040." On Schedule 2 (Form 1040), line 4, you check box 3 and enter "Exempt, see attached statement."

Then you do it again next year. Per IRS guidance, you attach a photocopy "to your Form 1040 each year you are exempt from U.S. self-employment tax." Every year you claim it, the certificate goes in.

Line numbers and box labels shift between tax years, so have your preparer confirm them against the instructions for the year you're filing. The mechanism has stayed the same: a certificate, a statement and no SECA.

If you hold your business through a US LLC or run a Dutch BV and pay yourself a salary, the coverage question changes shape. That's worth a proper conversation with a cross-border adviser. Our posts on whether to keep a US LLC when you move and choosing between a ZZP and a BV on DAFT set up the questions to ask.

Does Any of This Affect Your DAFT Permit?

Not directly. The IND doesn't ask for your SVB certificate. It cares that your business is real, that the €4,500 stays in your business account, and that the business is actually running when you renew. Our guide to what the IND checks at renewal covers that side.

Indirectly, though, the two go together. Being a Dutch-registered, Dutch-resident, Dutch-premium-paying entrepreneur is what gets you the certificate. It's also what the IND expects to see. A clean KvK record and Dutch tax filings help on both fronts.

The paperwork side of DAFT is our side. Our assessment takes about five minutes and tells you whether the treaty route fits your situation before you've spent anything on accountants.

Ready to prepare your documents? We generate your IND Form 7524 and the supporting documents around it, pre-filled and ready for you to review. We don't do your taxes, and we'll say so every time. Start your free assessment →

Frequently Asked Questions

Do DAFT visa holders pay US self-employment tax?

Typically not, once they live in the Netherlands and hold an SVB certificate of coverage. The US-Netherlands agreement covers a self-employed person only in their country of residence, so Dutch premiums (27.65% on the first €38,883 in 2026) replace the 15.3% US self-employment tax. Without the certificate attached to Form 1040, the IRS treats the full 15.3% as due.

Does the foreign earned income exclusion cover self-employment tax?

No. The IRS requires you to count all self-employment income for SE tax purposes, even income excluded on Form 2555. The FEIE can remove US income tax, but only the totalization agreement and an SVB certificate remove the 15.3%.

What Dutch social security do self-employed people pay in 2026?

Volksverzekeringen premiums of 27.65% (AOW 17.90%, Anw 0.10%, Wlz 9.65%) on income up to €38,883, a maximum of €10,751, collected through income tax. Self-employed people also pay a 4.85% Zvw contribution on income up to €79,409. Together with 8.10% income tax, the premiums make up the 35.75% first Box 1 bracket.

Who issues the certificate of coverage for Americans living in the Netherlands?

The Sociale Verzekeringsbank (SVB), the Dutch agency that also administers the AOW pension. Practitioners report that self-employed residents annotate the employee-oriented form and attach proof of their Dutch business, such as a KvK registration (€85.15) and btw filings. Request it with a start date matching when your Dutch residence and self-employment began.

Can you claim Dutch social premiums as a foreign tax credit?

Generally not. The IRS bars foreign tax credits for social security taxes paid to a country the US has a social security agreement with, and the Netherlands has had one since November 1, 1990. The relief comes from the exemption, not from a credit.

How do you show the exemption on a US tax return?

For tax year 2025, the IRS instructions say to skip Schedule SE, attach a copy of the certificate to Form 1040, and on Schedule 2, line 4, check box 3 and enter "Exempt, see attached statement." You attach the certificate every year you claim the exemption. Confirm the line numbers against the current year's instructions.

Does the 15.3% still apply in the year you move?

For part of the year, it can. Because coverage follows residence, self-employment before your move generally stays under US SE tax and self-employment after you became Dutch resident falls under Dutch premiums. How that split is shown on a move-year return depends on the dates on your certificate, so have a cross-border tax adviser prepare it.

Disclaimer: This guide is for informational purposes only and does not constitute legal, tax or immigration advice. Tax rules and rates change every year, and how a totalization agreement applies depends on your individual facts. Always verify current requirements with the IRS, the Belastingdienst, the SVB or a qualified cross-border tax adviser before filing.

Sources:

• Internal Revenue Service, "Self-employment tax for businesses abroad," https://www.irs.gov/individuals/international-taxpayers/self-employment-tax-for-businesses-abroad
• Internal Revenue Service, Instructions for Schedule SE (Form 1040), tax year 2025, https://www.irs.gov/instructions/i1040sse
• Internal Revenue Service, Topic no. 554, Self-employment tax, https://www.irs.gov/taxtopics/tc554
• Internal Revenue Service, Topic no. 751, Social Security and Medicare withholding rates (2026 wage base $184,500), https://www.irs.gov/taxtopics/tc751
• Internal Revenue Service, "Foreign taxes that qualify for the foreign tax credit," https://www.irs.gov/individuals/international-taxpayers/foreign-taxes-that-qualify-for-the-foreign-tax-credit
• Internal Revenue Service, Publication 54 (12/2025), Tax Guide for U.S. Citizens and Resident Aliens Abroad, https://www.irs.gov/publications/p54
• Social Security Administration, POMS RS 02001.625, "Coverage Rule for Self-Employment - U.S. Dutch Agreement," https://secure.ssa.gov/poms.nsf/lnx/0302001625
• Social Security Administration, POMS RS 02001.645, "How a Certificate of Coverage is Issued - U.S.-Dutch Agreement," https://secure.ssa.gov/apps10/poms.nsf/lnx/0302001645
• Social Security Administration, "U.S.-Netherlands Social Security Agreement" (certificate of coverage, form NL/USA 101), https://www.ssa.gov/international/Agreement_Pamphlets/netherld.html
• Social Security Administration, POMS GN 01725.001, "Overview of Agreement With the Netherlands," https://secure.ssa.gov/apps10/poms.nsf/lnx/0201725001
• Social Security Administration, POMS GN 01725.105, "Effective Date of the U.S.-Dutch Agreement," https://secure.ssa.gov/poms.nsf/lnx/0201725105
• Belastingdienst, "Hoeveel moet u betalen?" (premie volksverzekeringen 2026), https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/werk_en_inkomen/sociale_verzekeringen/premies_volks_en_werknemersverzekeringen/volksverzekeringen/hoeveel_moet_u_betalen
• Belastingdienst, "Premie volksverzekeringen" (2026 explanatory notes), https://www.belastingdienst.nl/wps/wcm/connect/fisin/fisin2026/premie_volksverzekeringen
• Belastingdienst, "Box 1: uitleg en tarieven," https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/inkomstenbelasting/heffingskortingen_boxen_tarieven/boxen_en_tarieven/box_1/box_1
• Belastingdienst, "Percentages inkomensafhankelijke bijdrage Zvw," https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/werk_en_inkomen/zorgverzekeringswet/veranderingen-bijdrage-zvw/percentages-zvw
• Sociale Verzekeringsbank (SVB), "Applying for an A1 certificate/certificate of coverage," https://www.svb.nl/en/id/applying-for-an-a1-certificate-of-coverage
• Business.gov.nl (Netherlands Enterprise Agency), "National and employee insurance schemes," https://business.gov.nl/regulations/employee-insurance-schemes-national-insurance/
• Americans Overseas, "Certificate of Coverage (Form A1)," https://americansoverseas.org/en/knowledge-centre/certificate-of-coverage/
• Taxes for Expats, "Social Security Certificate of Coverage & A1 guide for expats," https://www.taxesforexpats.com/articles/retirement/certificate-of-coverage-a1-form.html