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Do You Pay Taxes If You Dont Live There?  
User currently offlineB747skipper From , joined Dec 1969, posts, RR:
Posted (11 years 9 months 4 hours ago) and read 3146 times:

Dear Friends -
xxx
My question is this...
You are citizen of ABC country, but you work and live in XYZ country...
To whom do you owe income taxes to...?
The country you are from, or the country in which you work and live...?
xxx
Do you know that Americans expatriates, who live "forever" and work overseas for overseas companies, and never go back to USA, do pay income tax to their country AND the country in which they work and live... I know an American here from California (has not been back for 20 years to USA) and he pays USA Federal Income tax, and... California Income Tax as well... CRAZY.
And on top of that he pays Argentina income tax, here, etc...
xxx
(s)
Skipper  Smile

16 replies: All unread, jump to last
 
User currently offlineB747skipper From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 9 months 2 hours ago) and read 3127 times:

BTW - the reason for the questions is this... I know many people who are natives and citizen of various European nations, or Australia, NZ, or from Japan who work here in Argentina or South America... none of them pay income tax to "their country" - they all bank in Switzerland or Luxembourg, or Isle of Man... and they pay their income tax here, Argentina, locally...
xxx
All of them do work "tax free - offshore salaries" for international corporations. I still have many USA friends, since I was from there, and they instead (1) pay USA federal income tax, (2) state income tax and (3) Argentina taxes...
I understand USA is one of the very few countries taxing citizens abroad. Personally I took Argentina citizenship in 1994 but until then, I had been liable to pay some US$10,000 each year to IRS just for the pleasure of having a USA passport then... so I gave it back, and keep the $10,000 now...
xxx
(s) Skipper


User currently offlineVictech From United States of America, joined Jun 2000, 546 posts, RR: 2
Reply 2, posted (11 years 9 months 2 hours ago) and read 3125 times:

I know US citizens (i.e. everyone) living in Puerto Rico don't pay Federal income taxes unless they work for the government--then they file their 1040 just like everyone else in the US. Dual residency? No idea...

User currently offlineJimbobjoe From United States of America, joined Oct 2001, 653 posts, RR: 0
Reply 3, posted (11 years 8 months 4 weeks 1 day 23 hours ago) and read 3108 times:

Here we see the odd paradox.

The United States is one of just a handful of countries which assesses an income tax on its citizens even when they aren't actively living in the country. (Germany I believe is another one.)

**However**

An American in Puerto Rico doesn't pay income tax. Puerto Ricans can't vote for president/congress/blah, so they don't have to pay income taxes. This implies to me that a person who is a registered voter of Puerto Rico, and has no ties to any US state, then moves to, say, Argentina, wouldn't pay income tax, but I bet the paradox is too strange for that.

That's what I've been considering recently at least.



User currently offlineMandala499 From Indonesia, joined Aug 2001, 6767 posts, RR: 76
Reply 4, posted (11 years 8 months 4 weeks 1 day 19 hours ago) and read 3095 times:

In Indonesia:
Tax Law = Expats pay income taxes on all income derived within Indonesian territory, tax issues with your home country is covered under a tax treaty or is YOUR OWN PROBLEM. Citizens are "supposed" to pay on all income derived within Indonesian territory AND any other parts of the world (but no one checks the latter).

If you're Australian and you work in Indonesia, if your salary gets paid to a local bank, you pay income tax in Indonesia. If your salary gets paid into an Australian bank without an Australian invoice, you pay income tax. If you invoice your company for your work, then you do not pay Indonesian taxes ! Silly ? It is !

Best way to do it... open a number only account in Singapore, enter employment contract in Singapore for work in Indonesia. You do not pay tax as the company pays you to your Singapore account ! LOL (make sure you do not have Singaporean and or Malaysian residency/citizenship though)...

Mandala499



When losing situational awareness, pray Cumulus Granitus isn't nearby !
User currently offlinePacificjourney From New Zealand, joined Jul 2001, 2732 posts, RR: 8
Reply 5, posted (11 years 8 months 4 weeks 1 day 17 hours ago) and read 3090 times:

Americans only pay US tax on foreign income over $74,000, this amount being known as the Foreign Earned Income Exclusion.

The really odd part is that no proof is required/accepted as to how much you did earn and you simply write it down on the form. Naturally I - and every american I know- earn about $72,000 pa, wink wink.



" Help, help ... I'm being oppressed ... "
User currently offlineB747skipper From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 8 months 4 weeks 1 day 16 hours ago) and read 3082 times:

Oh yes... the first $74,000 is tax free...
xxx
A few problems through... with my job, I spend some 2 to 3 months in Miami at the training center (simulator) - 75 days average per year... they did consider that "working in the USA" although I work for a foreign airline, which does training in Miami...
xxx
Then all the perks were taxable too... housing paid by employer, free travel benefits, per diem... so I still paid some $10,000... so now, I do not have that problem any longer...
xxx
Why should I remain USA citizen anyway, living overseas... Terrorists shoot at Americans, they dont shoot Argentines... I dont have to wear a T shirt with Disneyworld logo, a Che Guevara T shirt suits me fine...
 Wink/being sarcastic
(s) Skipper


User currently offlineSAS23 From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 8 months 4 weeks 1 day 15 hours ago) and read 3082 times:

As far as I am aware, the only countries in the world that have the rule of taxation based on citizenship rather than residence are the US and the Philippines. To me, it seems grossly immoral.

Incidentally, B747skipper, under ICAO rules, when you are working for an airline in a foreign country you are supposed to be treated as tax exempt in that foreign country (as long as you are being paid at home rather than in said foreign company) and also exempt from work permits and other requirements.

Jimbobjoe - that anomaly goes back to the old "no taxation without representation" cry.


User currently offlineHepkat From Austria, joined Aug 2000, 2341 posts, RR: 2
Reply 8, posted (11 years 8 months 4 weeks 1 day 15 hours ago) and read 3078 times:

The really odd part is that no proof is required/accepted as to how much you did earn and you simply write it down on the form. Naturally I - and every american I know- earn about $72,000 pa, wink wink.

This is not entirely true. The U.S. has agreements with several countries, certainly with all the major western industrial ones, to report the incomes of ex-pat Americans living there. An elderly family friend living overseas was arrested upon entry at JFK for tax evasion. Her overseas property was seized until she was able to work out some agreement with the IRS.


User currently offlinePacificjourney From New Zealand, joined Jul 2001, 2732 posts, RR: 8
Reply 9, posted (11 years 8 months 4 weeks 1 day 15 hours ago) and read 3073 times:

Not too sure how they would receive that kind of information. The form asks if you

A, work for a US company overseas
B, a foreign company as part of a US subsidiary or
C, a wholely overseas company

In the case of A the IRS would have relatively easy access should they care to look but under B and C no way.

What I meant was that while most countries have some standard form of declaring income earned and tax payed (W-2 in US, B-2 in UK???, Zai shoku shomaishyo in Japan and IR12 in New Zealand for example) the IRS shows no interest in seeing any of these from people applying for the Foreign Income Exclusion even though the existance of these documents is well known.

Why not I don't know and frankly I don't want things to change either. Ignorance is certainly bliss in this case.



" Help, help ... I'm being oppressed ... "
User currently offlineJimbobjoe From United States of America, joined Oct 2001, 653 posts, RR: 0
Reply 10, posted (11 years 8 months 4 weeks 20 hours ago) and read 3044 times:

SAS23--"Jimbobjoe - that anomaly goes back to the old "no taxation without representation" cry. "

Yes i know...that's why I was wondering if it applies to a person who would vote a Puerto Rican absentee ballot living outside of the United States (because technically, they don't have representation.)


User currently offlineB747skipper From , joined Dec 1969, posts, RR:
Reply 11, posted (11 years 8 months 4 weeks 19 hours ago) and read 3038 times:

Well for me, owing taxes is "where you live/reside"... period... the only logic... If you live in Alabama, why should you pay taxes in Kansas...
xxx
I live in Argentina, I use the roads here, my kids go to the local schools, my taxes pay for hospital or medical services I am entitled to...
xxx
When I moved to Argentina, I asked myself, why in hell do I owe Uncle Sam a single penny... ? I work overseas, for a foreign company, I live overseas, my wife and kids are not USA citizens, nor have any intention to live in USA, except maybe 1 or 2 weeks vacation to see Disneyworld or Las Vegas...
xxx
And I have to wait age 62 to get my US Social Security, and my Air Force retirement (5 years active, 20 years reserve) - total will not even make $2,000... if they dont find a way to hold something because I cash it overseas...
xxx
Worse, in the USA, I could not fly as pilot after age 60, here I can continue to 65... so this is why I love it here... - and at least Al Qaeda does not target Argentina yet...
 Wink/being sarcastic
(s) Skipper


User currently offlineStaggerwing From United States of America, joined Mar 2002, 95 posts, RR: 1
Reply 12, posted (11 years 8 months 4 weeks 18 hours ago) and read 3034 times:

One other thing to keep in mind. The U.S. also allows you to deduct the taxes that you paid in the other country. So, you only pay the difference between the U.S. taxes and the foreign taxes. If the foreign taxes are higher you don't pay a thing.

Staggerwing


User currently offlinePower From Hungary, joined Jul 2002, 123 posts, RR: 0
Reply 13, posted (11 years 8 months 4 weeks 18 hours ago) and read 3030 times:

Hi Skipper,

I am a dual Australian and Hunagrian Citizen I work in Australia I pay tax here, when I worked in Hungary I payed tax there, I also worked offshore for a while I payed no tax, no one ever asked so I never payed. I personally think you should pay tax where you live.

Rgds


User currently offlineSAS23 From , joined Dec 1969, posts, RR:
Reply 14, posted (11 years 8 months 4 weeks 16 hours ago) and read 3037 times:

Staggerwing - that only applies in those countries that have a double taxation agreement with the United States. If there is not taxation agreement in place then you pay twice.

Another thing is that the US is one of the few countries where citizenship and passports are a priviledge, not a right. Therefore the government can - and has - stripped people of one or both as it feels fit.


User currently offlineB747skipper From , joined Dec 1969, posts, RR:
Reply 15, posted (11 years 8 months 4 weeks 16 hours ago) and read 3023 times:

Dear SAS23 -
xxx
Well, enough people want to get there - so I made some room for them -
Oh it is a privilege yes... but not worth some $10,000 per year...
 Smokin cool
(s) Skipper



User currently offlineBen From Switzerland, joined Aug 1999, 1391 posts, RR: 50
Reply 16, posted (11 years 8 months 4 weeks 11 hours ago) and read 3014 times:

I am a dual Australian/British citizen, born in Oz, living in the UK for 5 years.

If the Australian government were to ask me for one cent of tax for the income I am earning here, I will courier them my shredded Australian passport, a letter containing several choice words, and an invoice for the shipping costs.

I would have done exactly what Skipper did in that situation (giving up the native passport).

If you don't live in, and earn money in, a particular country, it's government has no right to demand tax on your foreign income.


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