The Foreign Tax Credit (FTC) is an expat tax benefit that provides a dollar-for-dollar reduction in your US tax liability for foreign earned income.
In general, the FTC allows you to offset your US tax liability with income taxes paid to your host country, whether in euros, pounds, yen, or any other currency.
For example, if you paid €100 in income taxes to the Dutch government as a resident of the Netherlands, you can claim a $100 credit and apply it to any US taxes you owe.
This helps to prevent double taxation on your foreign earned income.
Learn more about the Foreign Tax Credit.