On Receiving my Certificate of Loss of Nationality(rachelsruminations.com)
rachelsruminations.com
On Receiving my Certificate of Loss of Nationality
https://rachelsruminations.com/certificate-loss-nationality/
255 comments
There's a ton of related frictions too, FATCA makes it impossible for US persons (including citizens) to open a bank account in a many foreign countries, especially European ones. SEC regulations preclude Americans from opening foreign brokerage accounts. Any aggregate bank account balances over $10,000USD at any time in the calendar year requires filing with FinCEN - [edit] and failure to do so may result in forfeiture of up to 50% of the balance of said accounts.
Starting a business while abroad is especially painful as you are the beneficial owner of a controlled foreign corporation, and the tax reporting there is its own special hellscape.
Starting a business while abroad is especially painful as you are the beneficial owner of a controlled foreign corporation, and the tax reporting there is its own special hellscape.
American who‘s been abroad for a decade: I 100% agree. It introduces a lot of friction, complexity, and annoyance.
Beyond taxation, the limitations with American institutions when being domiciled abroad put you into a terrible edge-case with needing to crutch on someone stateside with an address. So much stupidity.
One addendum: while FATCA is newish and bad, the concept of taxation of Americans abroad dates back to the Civil War period. FATCA only made an existing injury worse.
Beyond taxation, the limitations with American institutions when being domiciled abroad put you into a terrible edge-case with needing to crutch on someone stateside with an address. So much stupidity.
One addendum: while FATCA is newish and bad, the concept of taxation of Americans abroad dates back to the Civil War period. FATCA only made an existing injury worse.
> "the concept of taxation of Americans abroad dates back to the Civil War period"
I'm not surprised, but could you provide some references on this...I am curious to read.
I'm not surprised, but could you provide some references on this...I am curious to read.
Just guessing, but I assume the Union wanted to continue to tax the Confederates who no longer lived in the Union because even though the succeeded from the Union, they were still Union citizens by birth.
seems unlikely. the Union didn't recognize the legitimacy of Confederate secession (hence, you know, the war.) the Emancipation Proclamation only applied to rebel states, as an example. they may have had trouble collecting taxes, what with the bullets and all, but amending the tax code doesn't help that.
Someone actually expanded on it down the page as a way to punish deserters.
…which is exactly what the US criticizes Eritrea for doing with its citizenship based taxation! The only other country in the world to do this.
>some negative impact on US competitiveness
Negative impact on US citizen's competitiveness, which means they're less likely to get jobs outside of the US. Which means more looking for jobs domestically, leading to lower cost of labour for corporations inside the US.
Negative impact on US citizen's competitiveness, which means they're less likely to get jobs outside of the US. Which means more looking for jobs domestically, leading to lower cost of labour for corporations inside the US.
Well I suppose that’s one interpretation but I think it misses the forest for the trees. Everything I’ve come across has discussed how it exacerbated trade imbalances due to a relatively lower proportion of Americans living abroad than citizens of other nationalities. Americans want to trade with Americans, like Chinese want to trade with Chinese. So having Americans abroad in bigger numbers helps for trade which I think would have a much bigger impact than some small reduction in labour costs locally.
Why would the multinationals that set the agenda in the US care about any of that?
Most of them make more money abroad than they do in the U.S. Setting up foreign branches is critical for their ability to reach new markets. Most of these branches are setup by U.S. citizens or permanent residents who have a deep history with their U.S-based employer and often personal connections with the executives at the home office. It is much easier to retain and pay these people if the bureaucratic hoops for retaining American citizenship abroad are less, and they will be less tempted to jump ship and set up competing businesses that jumpstart a foreign country's industry if it's convenient for them to stay American citizens.
Once they've set up the foreign branch, they don't really care if they retain them. Most foreign branches aren't staffed by Americans. This is also a 1 time thing in each country that they start a branch in, not an on going concern.
>they will be less tempted to jump ship and set up competing businesses that jumpstart a foreign country's industry
The number of instances of this happening has to be close to zero.
>they will be less tempted to jump ship and set up competing businesses that jumpstart a foreign country's industry
The number of instances of this happening has to be close to zero.
In my experience, something else happens - someone moves abroad to set up foreign office, then jumps ship to a competitor to set up a foreign office for them too.
None of this impacts a foreign employer’s employment of an American.
》This misses the point in that the US is the _only_ developed country to impose worldwide taxation on its citizens regardless of where they live
Not really. Norway does that for 3 years after leaving. Australia is very opinionated and may not allow people to change tax residency, even after physically moving out...
Not really. Norway does that for 3 years after leaving. Australia is very opinionated and may not allow people to change tax residency, even after physically moving out...
Norway and....Maryland. I've lived abroad most of my career and unwisely lived in Maryland for a short time. When I left to go abroad again, Maryland insisted on taxing my earnings, despite the overseas domicile. I found trying to fight Maryland over taxes was exasperating and futile.
protip: if you live in Maryland, and plan an overseas life, establish a domicile in a tax friendly state beforehand. Then leave. Otherwise, Maryland will own you. A pox on Maryland.
protip: if you live in Maryland, and plan an overseas life, establish a domicile in a tax friendly state beforehand. Then leave. Otherwise, Maryland will own you. A pox on Maryland.
You can renounce your statehood without renouncing your citizenship. Former Virginian here and I renounced my Virginia statehood for the same reason. It's common for American states to continue to tax their citizens after they leave. And there aren't really any downsides to not being a resident of any state.
That's also true for California. I established tax domicile in Nevada before expatriating.
Of course, nowadays Australia won't even let people physically leave at all!
I thought leaving was easy, but returning was the complicated part.
Nope:
> If you are an Australian citizen or a permanent resident you cannot leave Australia due to COVID-19 restrictions unless you have an exemption.
> If you are an Australian citizen or a permanent resident you cannot leave Australia due to COVID-19 restrictions unless you have an exemption.
You can leave at will if you're not an Australian citizen or a permanent resident. If you are, then you currently need an exemption, e.g for work or business, or you're going to live in another country.
Does this seem... reasonable? Citizens aren't allowed to leave unless they have 'compelling reasons' and provide evidence.
People used to escape communism for such reasons.
People used to escape communism for such reasons.
It probably cuts down on the number of citizens who wish to enter from covid land.
3 years seems reasonable. The USA does it forever.
There’s no if ands or buts for the US citizen though, other than the normal ones like making less than $10k a year or whatever.
I've always thought it was something like a middle finger to americans who leave.
"You're not part of this project, get out and stay out." There was a bill in the 1990s to permanently ban any Americans who renounce from coming back, which is hardcore.
But we're also a country that to war over a few states leaving. Whatever the reasons, it was equally hardcore to sacrifice so many to stop it. Maybe an intense dislike of people leaving is embedded in our blood.
"You're not part of this project, get out and stay out." There was a bill in the 1990s to permanently ban any Americans who renounce from coming back, which is hardcore.
But we're also a country that to war over a few states leaving. Whatever the reasons, it was equally hardcore to sacrifice so many to stop it. Maybe an intense dislike of people leaving is embedded in our blood.
Humorously enough, it was actually brought in as a way of punishing deserters in the civil war. [1]
> Civil War lawmakers were clearly suspicious of Americans who chose to live overseas, especially during the nation's most desperate hour. In his fascinating study of citizenship-based taxation, Kirsch offers a particularly apt quote from one Union lawmaker: "If a man draws his income from our public debt, or from property here, and resides in Paris, skulking away from contributing his personal support to the Government in this day of its extremity, he ought to pay a higher income tax."3
[1] http://www.taxhistory.org/thp/readings.nsf/ArtWeb/3AF72D29CA...
> Civil War lawmakers were clearly suspicious of Americans who chose to live overseas, especially during the nation's most desperate hour. In his fascinating study of citizenship-based taxation, Kirsch offers a particularly apt quote from one Union lawmaker: "If a man draws his income from our public debt, or from property here, and resides in Paris, skulking away from contributing his personal support to the Government in this day of its extremity, he ought to pay a higher income tax."3
[1] http://www.taxhistory.org/thp/readings.nsf/ArtWeb/3AF72D29CA...
I would say countries that prohibit dual citizenship are much more punitive towards those who leave. In the case of the US, compared to say Western Europe, we are so much more inward looking that policy towards expats is mostly one of neglect to even consider their interests.
If makes sense if we relax an assumption that the IRS and the agents therein are interested in optimizing tax revenue.
Some of her points are valid but the melodrama drawing analogies to stress from the death of a spouse, describing nearly breaking into tears every so often, and describing the consequences of her actions as something "done to her" are absurd.
Citizenship is a meaningful thing to most people. Of course it's a legal fiction, but so is marriage. Personally I've never given up a citizenship, but I imagine that it'd be an emotional experience.
I'm interested in knowing:how is citizenship a legal fiction ?
It exists only when people believe it exists. If no one believed in your citizenship, your passport would just be a little notebook with no value. When going from a world without citizenship to a world with it, nothing needs to change outside of the human brain. In that sense, it’s a fiction.
No. A passport says what country must take you when other places decide to deport you or refuse you entry.
You may be missing my point. If no one believes in the country’s existence, including the people who live in the land that the country is purported to encompass, then it doesn’t exist. Nations aren’t tangible physical objects. They exist in the collective human imagination. Yes. Your passport is just a notebook if no one believes in the country it is supposed to be for.
Sealand would be of note here. This is basically that exact scenario. Dude buys an old oil platform, calls it a country and issues a bunch of passports. Debates abound over whether they should be accepted or not.
I think its most clear at the extents. For instance, if you live in Point Roberts. [1]
Most people also associate citizenship with right of abode, but that's not always true either. For instance, the BN(O)s from Hong Kong are British Citizens who on that basis cannot live in England or Hong Kong - or anywhere. A separate document, an HKID or a visa, are required for them to live in HK and the UK respectively.
At the end of the day it's just paperwork that decides who negotiates your right to travel and is responsible for coming to get you if things go bad.
It doesn't really mean much else. Where you live and the government you engage with regularly in my opinion has far more bearing on you, your obligations and your benefits.
[1] https://goo.gl/maps/tmia7U6hef3Pvf4v8
Most people also associate citizenship with right of abode, but that's not always true either. For instance, the BN(O)s from Hong Kong are British Citizens who on that basis cannot live in England or Hong Kong - or anywhere. A separate document, an HKID or a visa, are required for them to live in HK and the UK respectively.
At the end of the day it's just paperwork that decides who negotiates your right to travel and is responsible for coming to get you if things go bad.
It doesn't really mean much else. Where you live and the government you engage with regularly in my opinion has far more bearing on you, your obligations and your benefits.
[1] https://goo.gl/maps/tmia7U6hef3Pvf4v8
Marriage is voluntary and almost always necessitates an emotional element.
I mean sure, but on the other hand WTF? I understand not sharing the emotions regarding the country, patriotism, the 4th of July, the standing for the pledge from school years onward etc. but despite your freedom from the effects of all this it should probably cross your mind that not everyone else is free in the same way.
Based on this post, apparently citizenship is also voluntary. You might say that giving up citizenship is difficult and expensive, but you should talk to someone who has gone through a divorce.
I would also counter that citizenship also almost always necessitates an emotional element. Citizenship is a primary part of many people's identity, and identity is the most emotionally charged thing of all.
I would also counter that citizenship also almost always necessitates an emotional element. Citizenship is a primary part of many people's identity, and identity is the most emotionally charged thing of all.
Divorce might be expensive, but never getting married is cheep.
It's either a fiction or it's real. And given the privileges that come with being a citizen, of course it is not a fiction.
But if it is meaningful, why should it not come with a cost? Nations as constructed obviously provide value to the people residing there, should this not come with corresponding responsibilities? Like paying taxes? And if there is value and meaning to being a citizen of a specific country why should a nation not place restrictions and requirements on this privilege? I could even see for example the incentive to ban dual citizenship as one. Why is it just assumed that keeping a bunch of citizenships, not paying taxes to that country, all while not living in that country is a thing that should exist?
It seems like these people want their cake and to eat it too. If the country wasn't good enough to live in, why would you expect to keep the citizenship if you leave? "Marriage" is a two-way street..
But if it is meaningful, why should it not come with a cost? Nations as constructed obviously provide value to the people residing there, should this not come with corresponding responsibilities? Like paying taxes? And if there is value and meaning to being a citizen of a specific country why should a nation not place restrictions and requirements on this privilege? I could even see for example the incentive to ban dual citizenship as one. Why is it just assumed that keeping a bunch of citizenships, not paying taxes to that country, all while not living in that country is a thing that should exist?
It seems like these people want their cake and to eat it too. If the country wasn't good enough to live in, why would you expect to keep the citizenship if you leave? "Marriage" is a two-way street..
> It's either a fiction or it's real.
This I disagree with. Nations are real in the sense that they have a material impact on the world, but are fictions in the sense that they only exist when people believe in their existence. It's like money. Obviously money is real - I have some in my wallet right now - but if no one believed in the currency then it wouldn't exist. It would just be pieces of paper.
> Nations as constructed obviously provide value to the people residing there
I would quibble with the assertion that this is the _reason_ nations are constructed, but I do agree that they provide value.
Some people's lives are just more complicated. I'm a dual citizen myself, with two citizenships from birth. I was born in Canada from two American parents. I've had two passports all my life. I happen to live in the US but I've never really chosen one country over the other. I derive identify from being a citizen of North America. There are plenty of people with slightly more complicated than average stories, they should be able to exist.
This I disagree with. Nations are real in the sense that they have a material impact on the world, but are fictions in the sense that they only exist when people believe in their existence. It's like money. Obviously money is real - I have some in my wallet right now - but if no one believed in the currency then it wouldn't exist. It would just be pieces of paper.
> Nations as constructed obviously provide value to the people residing there
I would quibble with the assertion that this is the _reason_ nations are constructed, but I do agree that they provide value.
Some people's lives are just more complicated. I'm a dual citizen myself, with two citizenships from birth. I was born in Canada from two American parents. I've had two passports all my life. I happen to live in the US but I've never really chosen one country over the other. I derive identify from being a citizen of North America. There are plenty of people with slightly more complicated than average stories, they should be able to exist.
This is not “having your cake and eating it too,” it’s much more complex. It also is never a case of “the country wasn’t good enough to live in.” I would love to live in the USA. That is not where life took me. At its simplest Americans are not free to live anywhere in the world the way citizens of all other countries are (even Eritrea, the only other country that taxes it’s citizens based on citizenship, does not subject its citizens to the same tax complexity). All Americans should be outraged over their lack of freedom in this regard. 20 years ago I could not have imagined I’d end up living in Australia, but we don’t always know where life will lead us.
Many people are born to American parents overseas and are required to spend thousands yearly to file or pay $2350 to renounce.
Paying double tax to two countries is unachievable for the majority of us. There are treaties in place to avoid the is happening, however the cost of having a specialist accountant file every year is astronomical. I have paid over $25k to accountants and never once owed tax to the US.
There are also some seriously unconstitutional and human rights violations going on. The surprise retroactive Transition tax of 2017 has financially ruined many small business owners, in some cases taking all their retirement savings. These are people who have worked and paid taxes in their residence country for their lifetime. There is a case in front of the Supreme Court challenging this right now.
But in this case, even though you were living abroad, you’re still a American citizen and required to pay taxes. It’s not America’s fault that you’re living abroad for a decade. Is your intention to stay there for life, and if so, just renounce your citizenship. If you’re not willing to contribute as a citizen, why remain a citizen?
Wow. I can’t wait to see what they do with the $0 tax I paid. It’s spending a lot more money validating that $0 tax, and I’m spending a lot more than $0, sharing information about my private life (more than I did as a US resident) to pay $0. I’m really curious what you’re expecting the $0 tax to contribute to?
But you asked, why remain a citizen? As a citizen, I can freely enter the US, even during a pandemic. When a relative dies, you want to go back and you shouldn’t have to worry about getting a tourist visa, you know? That’s not the only reason, but it’s a pretty big one.
But you asked, why remain a citizen? As a citizen, I can freely enter the US, even during a pandemic. When a relative dies, you want to go back and you shouldn’t have to worry about getting a tourist visa, you know? That’s not the only reason, but it’s a pretty big one.
he had pay tax, can not USA let him pay more easier?
Most people are strongly emotionally attached to their home country. Not sure why you would expect the breakup to be low-stress and unemotional.
Thats so weird. Why do people give a damn about something that only matters with legal matters and not anything about identity.
Legal matters have ramifications. She can never live in the US ever again. The loss of that option alone would be emotional for me, knowing that I have to chunk up time with loved ones into 90 day periods, or knowing that I never the option to say, move home and take care of my parents.
This comment has a sexist smell. I wonder if the same criticism would be leveled at an identical story written by a man.
Obviously, I have no idea what goes on in other peoples heads.
Obviously, I have no idea what goes on in other peoples heads.
Honestly? It would be worse if they were a man.
People don't take kindly to men being "weak".
People don't take kindly to men being "weak".
This comment has a blindered, dogmatic smell.
If the only tool you have is a hammer…
If the only tool you have is a hammer…
I don't disagree with the spirit of what you're saying. This is a burden for expat US citizens. A few notes and corrections though:
> Moreover, it makes expats ineligible for certain retirement savings in their country of domicile (as the US does not recognize pre-tax deductions for these investments, like those countries do not recognize investments in 401k’s).
This is true but unrelated to taxing worldwide income. Basically, there has to be bilateral/multilateral agreements between countries about how to treat contributions to and distributions from retirement accounts and these are very few and far between.
The US and Canada have such agreements but the US and Australia do not. So Australian superannuation accounts generally can't ever be closed so you have to keep reporting them to the US government every year, whether you're a citizen or not. Even those on work visas have to do this. Worse, it's unclear how gains in such accounts should be treated for US income tax purposes. There are literally no laws and no case law on the subject so everyone just has to guess.
> It also makes it challenging for expats to find banks willing to serve them because elf the added complexity.
So this is also mostly true but again (mostly) unrelated to taxing worldwide income. This is because of FATCA [1]. The US uses access to the US financial system as a wedge to get foreign financial institutions to report accounts of US citizens so being a US citizen imposes a reporting requirement on foreign banks that many don't want to deal with. It's easier not to offer services to US citizens. But again, FATCA reporting requirements aren't really the same thing as taxing worldwide income.
> ... lost taxes to be a mere fraction of the costs of enforcement.
The point here unfortunately isn't really to enforce anything. It's so if the US decides to get you, it's something else they can prosecute you for.
> This makes literally zero sense.
That's not strictly true either. The idea is that US citizenship is so beneficial that it justifies these costs. It's true that a US passport gives you a lot of access to various countries. I believe the US passport is right up there in the top 10 passports. I'd hazard a guess and say the only reason it's not even higher is Middle Eastern countries. Also, the State Department will make some efforts to recover and evacuate US citizens in certain circumstances.
Is this worth the hassle? Probably not but for some it is, I'm sure.
Still, there's definite room for improvement.
[1]: https://www.irs.gov/businesses/corporations/foreign-account-...
> Moreover, it makes expats ineligible for certain retirement savings in their country of domicile (as the US does not recognize pre-tax deductions for these investments, like those countries do not recognize investments in 401k’s).
This is true but unrelated to taxing worldwide income. Basically, there has to be bilateral/multilateral agreements between countries about how to treat contributions to and distributions from retirement accounts and these are very few and far between.
The US and Canada have such agreements but the US and Australia do not. So Australian superannuation accounts generally can't ever be closed so you have to keep reporting them to the US government every year, whether you're a citizen or not. Even those on work visas have to do this. Worse, it's unclear how gains in such accounts should be treated for US income tax purposes. There are literally no laws and no case law on the subject so everyone just has to guess.
> It also makes it challenging for expats to find banks willing to serve them because elf the added complexity.
So this is also mostly true but again (mostly) unrelated to taxing worldwide income. This is because of FATCA [1]. The US uses access to the US financial system as a wedge to get foreign financial institutions to report accounts of US citizens so being a US citizen imposes a reporting requirement on foreign banks that many don't want to deal with. It's easier not to offer services to US citizens. But again, FATCA reporting requirements aren't really the same thing as taxing worldwide income.
> ... lost taxes to be a mere fraction of the costs of enforcement.
The point here unfortunately isn't really to enforce anything. It's so if the US decides to get you, it's something else they can prosecute you for.
> This makes literally zero sense.
That's not strictly true either. The idea is that US citizenship is so beneficial that it justifies these costs. It's true that a US passport gives you a lot of access to various countries. I believe the US passport is right up there in the top 10 passports. I'd hazard a guess and say the only reason it's not even higher is Middle Eastern countries. Also, the State Department will make some efforts to recover and evacuate US citizens in certain circumstances.
Is this worth the hassle? Probably not but for some it is, I'm sure.
Still, there's definite room for improvement.
[1]: https://www.irs.gov/businesses/corporations/foreign-account-...
The US seems to be in 18th place worldwide along with France, Malta, Czech Republic, Greece, Poland, Hungary, United Kingdom, Canada.
Based on https://www.passportindex.org/byRank.php
The ratings are skewed because of COVID-19 related travel restrictions. Looking at the rankings in late 2019, US passport had an equal or higher rank than all but 5 countries.
https://web.archive.org/web/20191128002117/https://www.passp...
https://web.archive.org/web/20191128002117/https://www.passp...
In practice the 2021 108k per person foreign earned income exclusion is reasonably large and uncomplicated to claim. After that the list of countries we have tax treaties with is pretty large:
https://taxsummaries.pwc.com/united-states/individual/foreig...
https://taxsummaries.pwc.com/united-states/individual/foreig...
As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not.
I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.
I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.
> because you need an accountant that gets all this,
As someone who has been through this, perhaps you can explain why this is.
What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.
As someone who has been through this, perhaps you can explain why this is.
What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.
Americans living overseas generally go by a different financial year, for example, in Australia the financial year is July1-June 30. All income and business records need to be made to fit the US financial year. We also have different much more complex forms to fill out and have far more to report than the American citizen living in the US. All our bank details and highest balances must be reported. We also have to file forms with regards to our retirement investments. If you own your own business here it’s literally days of compiling and working out amounts. And if something is wrong, look out. The trust reporting form, 3520, (which most businesses must file) is due before your tax return, and if you don’t realise this it’s a 10k fine. Even for a trust with a balance of $0. Then another 10ks every month you are late after the fine is assessed. (It’s also worth mentioning that the IRS only communicates through snail mail and sends us letters out of some strange places, such as the Czech Republic, and they take 4 months to arrive) meaning you have tens of thousands worth of fines before you even know it. I wish this were a joke or I was exaggerating. For years accountants filed that trust form with tax returns, until the IRS suddenly realised this could be a money maker and quietly introduced the fine.
There’s so much more I could write but I have to go to work. I’m just trying to say it’s a never ending nightmare, and in most cases too complex for the average person.
You clearly never owned non-US mutual funds then.
If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact!
If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute.
And for retirement, I’m honestly not even sure what to do there, so yeah.
It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.
If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact!
If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute.
And for retirement, I’m honestly not even sure what to do there, so yeah.
It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.
This paper lays it out pretty well. There’s a parallel tax code that is more complicated, and that’s before the nuances of tax treaties factor in.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3795480
As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.
In practice US citizens have it difficult to even open simple bank account. Most foreign companies prefer not to deal with US gov.
Yes! Banks in Germany would flatly say "we can't help you" when I pulled out my US passport. The only one I could get was Number26, which is technically only an online bank account.
N26 is in the headlines for money laundering incompliance. Probably not at all related to average American expats, but as soon as they strengthen their processes they might find it the easiest not to do business with a couple of Americans.
> which is technically only an online bank account.
Which is technically also a normal bank account.
Which is technically also a normal bank account.
It depends on the country and the financial institution. I'm a permanent resident of another country and had no problem opening an account there(on vacation there the first time no less). Another user here reports a very easy experience opening an account with an institution in the Netherlands.
I have a question about this, that I've never been able to find a good answer to: what happens if you unilaterally renounce US citizenship?
Consider the situation: you're a dual US / Dutch citizen. You want to avoid paying US income tax (or just to avoid filling in a form each year that results in the IRS telling you that your tax bill is $0 because the Netherlands' tax rate is higher). But the State Department's renunciation route takes 3-4 years. So you mail them a letter instead announcing that you are renouncing your citizenship, and you include your US passport with the letter. You don't send the IRS a tax return in subsequent years, and you tell all your banks that you are not a US citizen and ask them to update your details accordingly.
I assume that what happens next is that your bank has a procedure for asking the US State Department if you have renounced your citizenship, and they say "no". So the bank continues to treat you as a US citizen, with all of the reporting obligations that entails.
Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship.
I have never heard of such a case (either in the Netherlands or elsewhere), so I assume this has never been attempted. I don't know if that is because there is a strong reason to suspect that it would fail.
Consider the situation: you're a dual US / Dutch citizen. You want to avoid paying US income tax (or just to avoid filling in a form each year that results in the IRS telling you that your tax bill is $0 because the Netherlands' tax rate is higher). But the State Department's renunciation route takes 3-4 years. So you mail them a letter instead announcing that you are renouncing your citizenship, and you include your US passport with the letter. You don't send the IRS a tax return in subsequent years, and you tell all your banks that you are not a US citizen and ask them to update your details accordingly.
I assume that what happens next is that your bank has a procedure for asking the US State Department if you have renounced your citizenship, and they say "no". So the bank continues to treat you as a US citizen, with all of the reporting obligations that entails.
Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship.
I have never heard of such a case (either in the Netherlands or elsewhere), so I assume this has never been attempted. I don't know if that is because there is a strong reason to suspect that it would fail.
> Your method of enforcing this would (I assume) be to file a suit against the bank in the Netherlands and seek an order to prevent them from passing any information on you to the IRS. You would effectively be asking a Dutch court to rule on whether you can unilaterally renounce US citizenship.
This is incorrect. The method of enforcing tax obligations is spelled out in bilateral tax treaties. In this instance the US would lean on the Netherlands to enforce it and failure to pay the obligations to the Dutch would be punished by whatever their tax law says.
This is incorrect. The method of enforcing tax obligations is spelled out in bilateral tax treaties. In this instance the US would lean on the Netherlands to enforce it and failure to pay the obligations to the Dutch would be punished by whatever their tax law says.
I expect there is such a treaty, but presumably it specifies that the Netherlands will have certain obligations regarding US citizens that reside in the Netherlands. I doubt it will be specific on who actually is a US citizen.
Further, you might still be able to prevail in a court. You would essentially be asking a court to find that you have a unilateral right to renounce a citizenship. Again, I doubt such a right is explicitly set out in any Netherlands law, but you would would be arguing that such a right is implied by some other principles. If the court were to find in your favor, the fact that the Netherlands has a treaty to the contrary would merely mean that the treaty was now incompatible with Dutch law.
Further, you might still be able to prevail in a court. You would essentially be asking a court to find that you have a unilateral right to renounce a citizenship. Again, I doubt such a right is explicitly set out in any Netherlands law, but you would would be arguing that such a right is implied by some other principles. If the court were to find in your favor, the fact that the Netherlands has a treaty to the contrary would merely mean that the treaty was now incompatible with Dutch law.
The obligations are not owed to the Dutch, and I find extremely unlikely that the tax treaty includes language which says "the fee for renouncing citizenship, if unpaid, shall be paid to the Dutch". In the outlined scenario, no taxes are owed. What is not paid is the fee for renoucning, and what has not been done is filing the paperwork. So the question is whether the tax treaty covers this, and whether or not a Dutch court would try to act on behalf of the US government regarding these matters.
It depends on the treaty, many are like you say, but not all include mutual collection/enforcement of tax debts.
It will make you in violation of the law, and that could come back to haunt you in the future, for instance when and if you want to go and visit your family back in the USA.
I would strongly recommend against going that route.
Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.
I would strongly recommend against going that route.
Besides that, you still have to get your 'new' country to give you citizenship as well, which will go a lot smoother if the new citizenship is paired with renouncing the USA one, you really don't want to become 'stateless' for many reasons.
There is no unilateral renunciation of citizenship. The tax treaty between the US and the Netherlands has what is known as a 'savings clause', which basically states, regardless of what else is in the treaty, nothing will stop the U.S. from taxing the US person based on US laws as though the treaty did not exist, except for specified circumstances.
https://hr.vanderbilt.edu/international-tax/tax_treaty_savin...
https://hr.vanderbilt.edu/international-tax/tax_treaty_savin...
I don't think citizenship in general can be unilaterally renounced, in the same way as you usually can't unilaterally divorce somebody. Citizenship includes obligations both from the state towards an individual and vice versa. In my understanding (IANAL) the easiest way to unilaterally renounce a citizenship is to seek political asylum.
At least in the US, unilateral no-fault divorce is possible in nearly all states.
I don't think the Dutch court has any authority with regards to your US citizenship. It would be a massive breach of national sovereignty if Dutch judges could strip Americans of their citizenship.
They could prevent the Dutch banks transmitting your info, but they can do that regardless of your US citizenship.
The likely outcome is the Dutch court refuses to touch it. Even if you win, I don't think they'd touch your citizenship. They'd just refuse to extradite. They don't have to do what the US wants just because the subject is a US citizen.
The US is going to be infinitely more interested in preventing this than the Dutch are in allowing it though.
They could prevent the Dutch banks transmitting your info, but they can do that regardless of your US citizenship.
The likely outcome is the Dutch court refuses to touch it. Even if you win, I don't think they'd touch your citizenship. They'd just refuse to extradite. They don't have to do what the US wants just because the subject is a US citizen.
The US is going to be infinitely more interested in preventing this than the Dutch are in allowing it though.
It is good business for gov, so of course it fails.
There is something similar that happens regularly.
Perhaps look at gaining citizenship at country that allows only single citizenship. It should make American citizenship null and void.
There is something similar that happens regularly.
Perhaps look at gaining citizenship at country that allows only single citizenship. It should make American citizenship null and void.
Germany is such a country. However, as part of granting you citizenship they do a search for other countries that you have citizenship of. I believe they will not grant you German citizenship until you have relinquished your other citizenship.
I suppose another test case would be if you were to apply for German citizenship following your unilateral renunciation.
I suppose another test case would be if you were to apply for German citizenship following your unilateral renunciation.
You can get double citizenship in Germany by birth and if the other country does generally not grant loss if nationality. Some other exception I don't recall by heart, but generally not.
And nowadays without difficulty if the other country is a EU country. But that is a deviation from German law tradition EU has forced on them.
And nowadays without difficulty if the other country is a EU country. But that is a deviation from German law tradition EU has forced on them.
If you had to give up any other citizenships first, then you'd be temporarily stateless. And then what if Germany decided not to make you a citizen after that? Where would they deport you to?
Statelessness exists, but the UN treats it as a human rights concern so I doubt Germany would impose it.
Statelessness exists, but the UN treats it as a human rights concern so I doubt Germany would impose it.
The way it works in Austria, another country that only allows single citizenship is as follows.
You apply for Austrian citizenship while you still have your original citizenship. Austrian authorities decide whether or not you should receive citizenship, *but do not grant it to you*
Instead they give you documents that basically say that you have an entitlement to Austrian citizenship the second you renounce all other citizenships, if possible. There are exceptions for some, none cooperative nations.
So if you are a US citizen you would basically have a document that says you are an Austrian citizen the second you renounce your American one. I imagine the Germany handles it similarly
You apply for Austrian citizenship while you still have your original citizenship. Austrian authorities decide whether or not you should receive citizenship, *but do not grant it to you*
Instead they give you documents that basically say that you have an entitlement to Austrian citizenship the second you renounce all other citizenships, if possible. There are exceptions for some, none cooperative nations.
So if you are a US citizen you would basically have a document that says you are an Austrian citizen the second you renounce your American one. I imagine the Germany handles it similarly
That's fascinating.
I'm not a lawyer but I'd guess that since you're citizen at the time, you'd have to follow the law for renouncing citizenship. You "unilaterally" renouncing it wouldn't mean anything since the law of the country says different.
Perhaps consult a lawyer and if they say that there might be something there try to crowdfund it.
I'm not a lawyer but I'd guess that since you're citizen at the time, you'd have to follow the law for renouncing citizenship. You "unilaterally" renouncing it wouldn't mean anything since the law of the country says different.
Perhaps consult a lawyer and if they say that there might be something there try to crowdfund it.
> since the law of the country says different.
But this is exactly the point. US law specifies what you must do to give up US citizenship. And the US would continue to regard you as a citizen - you definitely put yourself in a position of not being able to set foot on US soil without consequences if you go this route.
But remember, in this scenario you live in the Netherlands. You want Dutch law to agree that you are not a US citizen, thus relieving you of your obligations so long as you continue to live in the Netherlands.
But this is exactly the point. US law specifies what you must do to give up US citizenship. And the US would continue to regard you as a citizen - you definitely put yourself in a position of not being able to set foot on US soil without consequences if you go this route.
But remember, in this scenario you live in the Netherlands. You want Dutch law to agree that you are not a US citizen, thus relieving you of your obligations so long as you continue to live in the Netherlands.
Oswald did as his passport said, renounced his citizenship, but the embassy attache did nothing further with it.
> you tell all your banks that you are not a US citizen and ask them to update your details accordingly.
Banks abroad demand proof beyond just telling them that. You need to show the Certificate of Loss of Nationality or present a US Taxpayer Identification Number.
Banks abroad demand proof beyond just telling them that. You need to show the Certificate of Loss of Nationality or present a US Taxpayer Identification Number.
I've once had a pleasure of trying to convince a Swiss bank that I am neither US citizen nor resident. Fortunately it boiled down to a few phone calls and a couple of letter saying that I am really really not a US citizen, I swear.
This is why I suspect such an attempt would require going via the courts. You would say to the bank "I have unilaterally renounced my citizenship", the bank would not accept it, and you would be asking the court to order the bank to recognize that renunciation.
Why not tell them you were never a US citizen and present them with a passport from another country?
One catch is that if the passport is like the UK or US passports (i.e. perhaps all?) it will show your place of birth, and if (like the UK Prime Minister) that was within the US, anyone with half a brain will know that from the US perspective, you were born a US citizen.
One catch is that if the passport is like the UK or US passports (i.e. perhaps all?) it will show your place of birth, and if (like the UK Prime Minister) that was within the US, anyone with half a brain will know that from the US perspective, you were born a US citizen.
Apart from FATCA, there is also the Expatriation Tax, introduced after Facebook cofounder Eduardo Saverin took his money out of the country by renouncing citizenship [0,1,2]. This often referred to as Exit Tax.
It also applies to Greencard holders for more then 8 years, defined as long term permanent residents.
The Exit Tax is a huge tax penalty (37%) on anyone owning more than $2 million [3].
[0] https://taxfoundation.org/outraged-facebook-expatriate-sens-...
[1] https://www.politico.com/story/2012/05/ex-patriot-act-would-...
[2] https://www.casey.senate.gov/news/releases/casey-schumer-ann...
[3] https://www.irs.gov/individuals/international-taxpayers/expa...
It also applies to Greencard holders for more then 8 years, defined as long term permanent residents.
The Exit Tax is a huge tax penalty (37%) on anyone owning more than $2 million [3].
[0] https://taxfoundation.org/outraged-facebook-expatriate-sens-...
[1] https://www.politico.com/story/2012/05/ex-patriot-act-would-...
[2] https://www.casey.senate.gov/news/releases/casey-schumer-ann...
[3] https://www.irs.gov/individuals/international-taxpayers/expa...
Is that right? From reading the third document you linked:
"IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date."
Unless this document is leaving something out, the gains would not be taxed at the marginal income rate unless they are short term gains. Presumably most people with large amounts of unrealized gains would be paying long term capital gains taxes, which are currently a 20% rate.
I thought this provision was simply to ensure that you didn't make large amounts of wealth in the US then skip out on paying taxes on your gains. That seems very reasonable to me, although perhaps I am missing something.
"IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date."
Unless this document is leaving something out, the gains would not be taxed at the marginal income rate unless they are short term gains. Presumably most people with large amounts of unrealized gains would be paying long term capital gains taxes, which are currently a 20% rate.
I thought this provision was simply to ensure that you didn't make large amounts of wealth in the US then skip out on paying taxes on your gains. That seems very reasonable to me, although perhaps I am missing something.
If you're an "accidental American" (holding US citizenship due to having being born in the US, though never having resided there as an adult) in a French-speaking European country, you may be interested in the "accidental Americans" association
https://www.americains-accidentels.fr/
For what it's worth, there are a few other reasons a US citizen may be compelled to disclose quite a bit of financial detail without being criminals. Just from what I've experienced, joining the Army, getting a security clearance, and attempting to become an adoptive parent all required having to disclose basically everything, up to and including people coming to my house to interrogate me on why I got divorced 18 years ago, having to take a polygraph. All in spite of definitely not being a criminal.
I'm not complaining. This is all voluntary (though I think the adoption licensing is excessive, given it's even worse than getting a security clearance whereas a biological parent just needs to inject sperm into someone). But living overseas is also voluntary.
I completely agree that the US government is unnecessarily overbearing about this kind of thing compared to most other countries, but let's be honest about how widespread this is. It's not at all limited to burdening expats. Even down to cosmetology licensing, we do this kind of thing everywhere, at every level of government, to many types of people.
This presumably contributes to why Americans are so anti-government compared to Europeans. Our main points of interaction with governments are often things like this. Just this morning, I finally managed to pay off four years worth of back property taxes. The stupid thing about it is I've been trying to pay the entire time. The money has always been sitting in an escrow account. But something about our deed was incorrect, the county had no record of my lot existing, and we couldn't pay! When they finally corrected the deed, we not only got the four years worth of charges, but late penalties on top of it, even though I'd been trying to pay! And because the past year's charges were all listed as supplemental, the escrow account didn't even pay it and I've been fighting with them for 8 months to give me back my money so I can pay my taxes.
So you are not alone, Rachel Heller.
I'm not complaining. This is all voluntary (though I think the adoption licensing is excessive, given it's even worse than getting a security clearance whereas a biological parent just needs to inject sperm into someone). But living overseas is also voluntary.
I completely agree that the US government is unnecessarily overbearing about this kind of thing compared to most other countries, but let's be honest about how widespread this is. It's not at all limited to burdening expats. Even down to cosmetology licensing, we do this kind of thing everywhere, at every level of government, to many types of people.
This presumably contributes to why Americans are so anti-government compared to Europeans. Our main points of interaction with governments are often things like this. Just this morning, I finally managed to pay off four years worth of back property taxes. The stupid thing about it is I've been trying to pay the entire time. The money has always been sitting in an escrow account. But something about our deed was incorrect, the county had no record of my lot existing, and we couldn't pay! When they finally corrected the deed, we not only got the four years worth of charges, but late penalties on top of it, even though I'd been trying to pay! And because the past year's charges were all listed as supplemental, the escrow account didn't even pay it and I've been fighting with them for 8 months to give me back my money so I can pay my taxes.
So you are not alone, Rachel Heller.
To be fair, hellish experiences with bureaucracies, licensing bodies, etc. are by no means unique to the US; I take it you've never experienced the joy of a French bureaucracy
Why is there an assumption that citizenship should extend to people living outside of a country as citizens of another country?
There's a lot of complaints here about annoying and costly taxation of "expats" but there's no discussion of why it should be valid to have citizenship but not reside in that country's borders?
What is citizenship for except to actually be a citizen? And what does that mean, living in another place and being a citizen there? Or should it mean actually contributing to the country you are a citizen of by living and working there, building the "community" you claim to be a part of? Should it not come with obligations to pay taxes to the country you are a citizen of?
I don't get the mindset that views it as some right and not a privilege that comes with responsibilities.. I think it's even perfectly valid for nations to ban dual citizenship itself.
People like the OP who produce dozens of posts documenting the supposed injustice following her own decision to move to another country are the epitome of the term "rootless cosmopolitan". What interest of a nation does it serve to cater to these people that have left for greener pastures?
There's a lot of complaints here about annoying and costly taxation of "expats" but there's no discussion of why it should be valid to have citizenship but not reside in that country's borders?
What is citizenship for except to actually be a citizen? And what does that mean, living in another place and being a citizen there? Or should it mean actually contributing to the country you are a citizen of by living and working there, building the "community" you claim to be a part of? Should it not come with obligations to pay taxes to the country you are a citizen of?
I don't get the mindset that views it as some right and not a privilege that comes with responsibilities.. I think it's even perfectly valid for nations to ban dual citizenship itself.
People like the OP who produce dozens of posts documenting the supposed injustice following her own decision to move to another country are the epitome of the term "rootless cosmopolitan". What interest of a nation does it serve to cater to these people that have left for greener pastures?
I was born in the US to Canadian parents who promptly moved back to Canada where I have lived for the subsequent 55 years. Other than a US birth certificate I had no interaction with the US gov - we politely ignored eachother like a huge number of Canadians in the same situation. The informal status quo was that we both acted as if the "US citizenship by birth in the US" thing had not happened.
Until a few years ago when the US gov declared that I would be a criminal unless I became a full fledged US citizen. They also made this as difficult, expensive, confusing and time consuming as possible. For example having to find some paper documentation that is was living in Canada in 1967 etc. Huge costs - all of it going to specialist accountants - none to the IRS. And a huge complicated ongoing burden.
I am not even allowed to renounce until I have gone through this charade for a few years.
What has the US got out of this? They have processed lots of paperwork on my behalf and they have sent me some (unsolicited) stimulus checks which paid a tiny portion for the (Canadian) accountant fees they have saddled me with.
Until a few years ago when the US gov declared that I would be a criminal unless I became a full fledged US citizen. They also made this as difficult, expensive, confusing and time consuming as possible. For example having to find some paper documentation that is was living in Canada in 1967 etc. Huge costs - all of it going to specialist accountants - none to the IRS. And a huge complicated ongoing burden.
I am not even allowed to renounce until I have gone through this charade for a few years.
What has the US got out of this? They have processed lots of paperwork on my behalf and they have sent me some (unsolicited) stimulus checks which paid a tiny portion for the (Canadian) accountant fees they have saddled me with.
Serious question: How did they even find you? Did they seriously do a dragnet of all birth certificates and send you a letter in Canada or something?
They tell all the Canadian banks and financial institutions that they have to ask all customers whether they are US citizens (and you lose account access if you won't answer).
The Canadian banks then have to report all the accounts of US citizens to the US gov. The banks comply with all this because otherwise they get super nasty fines against their us operations.
Also: they tell you that if you come in under the amnesty program (like I did) that their will be no big penalties - but if you wait until the amnesty program expires - and they then find you - they will treat you like a criminal.
The Canadian banks then have to report all the accounts of US citizens to the US gov. The banks comply with all this because otherwise they get super nasty fines against their us operations.
Also: they tell you that if you come in under the amnesty program (like I did) that their will be no big penalties - but if you wait until the amnesty program expires - and they then find you - they will treat you like a criminal.
Wow. My initial thought was just to lie. But given what you said I’m not sure what the right approach would be. What a terrible situation.
What interest does it serve to make their life hard? She just wants to pay taxes where she works and lives. And what’s wrong with being a “rootless cosmopolitan”?
I don’t think anyone would mind losing their US citizenship as soon as they leave the country, if you could also regain it as soon as you enter
I don’t think anyone would mind losing their US citizenship as soon as they leave the country, if you could also regain it as soon as you enter
Because the alternatives are pretty bad (although a middle ground should be possible, like some countries cancel your citizenship automatically when you acquire another):
- Being stateless makes it virtually impossible to travel
- Most countries are hesistant to grant citizenship to visitors
I see very little reason as to why rootlessness has been made really hard in our current global system. I am not sure in whose interest it is that this cosmopolitanism has been made so bureaucratic.
I see very little reason as to why rootlessness has been made really hard in our current global system. I am not sure in whose interest it is that this cosmopolitanism has been made so bureaucratic.
If the renunciation fee weren’t $2k, you might have a point. But it is extremely expensive to renounce, and that by itself completely invalidates your implied point that there is some underlying reason for the cruelty.
By your logic citizenship should then be granted to anyone deciding to go live in another country. Either that or country should prevent immigrants from moving there.
There are people who, during their lifetime, live on different countries. So according to you someone who lives in four countries should change nationality three times?
> I think it's even perfectly valid for nations to ban dual citizenship itself.
Some do, some don't. In doubt I always vote for the option giving the individual more freedom: so even though I don't hold dual citizenship, I'm glad for those who do (except when it's US + another one and the US one proves to be a pain when living outside the US, as is the case in TFA).
> What interest of a nation does it serve to cater to these people that have left for greener pastures?
All I see is a free individual telling her tale.
BTW you used the term "rootless cosmopolitan" to describe her: apparently that's some soviet-era antisemitic insult.
The evil free individual, how dared she abandon the nation state?
There are people who, during their lifetime, live on different countries. So according to you someone who lives in four countries should change nationality three times?
> I think it's even perfectly valid for nations to ban dual citizenship itself.
Some do, some don't. In doubt I always vote for the option giving the individual more freedom: so even though I don't hold dual citizenship, I'm glad for those who do (except when it's US + another one and the US one proves to be a pain when living outside the US, as is the case in TFA).
> What interest of a nation does it serve to cater to these people that have left for greener pastures?
All I see is a free individual telling her tale.
BTW you used the term "rootless cosmopolitan" to describe her: apparently that's some soviet-era antisemitic insult.
The evil free individual, how dared she abandon the nation state?
>By your logic citizenship should then be granted to anyone deciding to go live in another country. Either that or country should prevent immigrants from moving there.
Of course it makes sense for countries to restrict who they want to come in, and no I don't think my logic dictates that citizenship should be granted to anyone just because they want to come in.
I'm describing people who have "rejected" being a citizen of a country by virtue of leaving, living in another place and working for the economy and community outside of the nation who they were a citizen of before.
I'm saying that being a citizen has value and so it should come with a cost, or it should be given up (or taken away). And that this shouldn't be very controversial. Certainly if you left an organization and worked for someone else you wouldn't be considered part of the old company? Or if you were on a sports team and left to another, same thing. It is up to each organization to determine the standards by which they assess granting membership.... leaving the org is certainly an legitimate criteria for revoking it.
>The evil free individual, how dared she abandon the nation state?
In and of itself I don't think it's that big of a deal, what I'm saying is, from the perspective of the home nation and its people... the citizens who didn't leave, why would it make any sense for them to cater to the people that left? To worry about their every whim and desire? They left. A nation and its people are those who are there and working to contribute to it and make it stronger. This is such common sense I don't understand the mindset who would think otherwise.
The crux of the argument here comes down to this: OF COURSE from the perspective of individuals moving all over the world, they want absolute freedom, to do whatever they want, to go wherever they want, to have all the rights and priviliges of all the places they can possibly get with no costs. But this has nothing to do with what is best and desirable for a nation itself. What is best for the nation as a whole, including the people that actually live there, doesn't always match up with what people roaming all over the world want. And so the interests of people actually living in a place are no less valid nor do they matter less (I think they matter more, actually) than the interests of people that don't live in a place.
Of course it makes sense for countries to restrict who they want to come in, and no I don't think my logic dictates that citizenship should be granted to anyone just because they want to come in.
I'm describing people who have "rejected" being a citizen of a country by virtue of leaving, living in another place and working for the economy and community outside of the nation who they were a citizen of before.
I'm saying that being a citizen has value and so it should come with a cost, or it should be given up (or taken away). And that this shouldn't be very controversial. Certainly if you left an organization and worked for someone else you wouldn't be considered part of the old company? Or if you were on a sports team and left to another, same thing. It is up to each organization to determine the standards by which they assess granting membership.... leaving the org is certainly an legitimate criteria for revoking it.
>The evil free individual, how dared she abandon the nation state?
In and of itself I don't think it's that big of a deal, what I'm saying is, from the perspective of the home nation and its people... the citizens who didn't leave, why would it make any sense for them to cater to the people that left? To worry about their every whim and desire? They left. A nation and its people are those who are there and working to contribute to it and make it stronger. This is such common sense I don't understand the mindset who would think otherwise.
The crux of the argument here comes down to this: OF COURSE from the perspective of individuals moving all over the world, they want absolute freedom, to do whatever they want, to go wherever they want, to have all the rights and priviliges of all the places they can possibly get with no costs. But this has nothing to do with what is best and desirable for a nation itself. What is best for the nation as a whole, including the people that actually live there, doesn't always match up with what people roaming all over the world want. And so the interests of people actually living in a place are no less valid nor do they matter less (I think they matter more, actually) than the interests of people that don't live in a place.
Canada Revenue Agency requires me to file an even more detailed annual report on my foreign assets than I must furnish the IRS / FBAR / FinCEN. It's the most time consuming part of my tax filing.
Such a pain that CRA makes you do this for US stocks you hold at a Canadian stock broker.
At least it’s only acquisition price you need to worry about.
At least it’s only acquisition price you need to worry about.
It's not like a divorce, because there is no way to become a US citizen again after you've renounced your citizenship.
e: I was wrong; see below.
e: I was wrong; see below.
Can you share a source for that? I know at least 1 person first hand who has renounced and then later on in their life regained citizenship. It's possible the rules around this have changed however.
Yes, I think the rules might have changed. Apparently nowadays you can regain it "under very limited circumstances": https://www.usa.gov/renounce-lose-citizenship
When did the rules change? You may have just been mistaken. I thought it was always possible to gain citizenship again, assuming you're eligible like anyone else and are willing to go through the normal citizenship process.
Are you saying the immigrant visa path isn't available to former citizens? That seems surprising.
Sure, it's a very difficult path in practice... But in theory I don't see why something like this wouldn't be possible: you renounced your citizenship, win the Nobel Prize 30 years later, get an EB-1 visa based on that achievement, then get naturalized five years later.
Sure, it's a very difficult path in practice... But in theory I don't see why something like this wouldn't be possible: you renounced your citizenship, win the Nobel Prize 30 years later, get an EB-1 visa based on that achievement, then get naturalized five years later.
There have been (so far unsuccessful, but possibly successful in the future) attempts to ban US citizens who renounce from ever stepping foot in the US again.
> (E) Former citizens who renounced citizenship.— Any alien who is a former citizen of the United States who officially renounced United States citizenship is inadmissible. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)
> (E) Former citizens who renounced citizenship.— Any alien who is a former citizen of the United States who officially renounced United States citizenship is inadmissible. https://en.m.wikipedia.org/wiki/Reed_Amendment_(immigration)
This is banning reentry for those who have stated their reason for renouncing is due to tax avoidance. When I renounced I began telling them it was due to tax compliance, and they were very careful to not let me say tax avoidance. It is completely different. I’d be happy to pay an a amount to the US for citizenship every year but can’t deal with the thousands I pay accountants and the days I spend compiling and working out amounts for the calendar year as opposed to the Australian financial year. Also the anxiety over the ever changing laws and fines.
This reentry ban has never been enforced but could be in the future, if anyone has actually been able to say they renounced due to tax avoidance.
This reentry ban has never been enforced but could be in the future, if anyone has actually been able to say they renounced due to tax avoidance.
Yes, the Reed Amendment as passed is as you describe. However, see the section in the linked page on the SAFER Act.
As a US citizen, being taxed while living abroad can dangerously trigger double taxation. Imagine being taxed 70% of your income... scary! I've been researching ways to live abroad without being double-taxed, and here's some resources I've found:
* https://www.greenbacktaxservices.com - give them your foreign tax return and they file your US return
* https://wandererswealth.com - international tax consultant
* https://nomadcapitalist.com/book - modern flag theory, talks about moving your life and business overseas to control your tax rate
For bank accounts, I had trouble opening them in Germany (US citizens are to foreign banks like GDPR is to US companies) except for Number26 however that's an online-only account:
* https://n26.com/
Edit: Why am I getting downvoted for sharing useful resources? I'm not affiliated with these links in any way.
* https://www.greenbacktaxservices.com - give them your foreign tax return and they file your US return
* https://wandererswealth.com - international tax consultant
* https://nomadcapitalist.com/book - modern flag theory, talks about moving your life and business overseas to control your tax rate
For bank accounts, I had trouble opening them in Germany (US citizens are to foreign banks like GDPR is to US companies) except for Number26 however that's an online-only account:
* https://n26.com/
Edit: Why am I getting downvoted for sharing useful resources? I'm not affiliated with these links in any way.
Owning a business in a country where the taxes are lower than the US corporate rate triggers double tax, as well as any passive income investments. The US can tax a residence that sells for a profit while the residential country will not. Disability support earners have been taxed on their income from their resident country as well.
I have no idea why you might be downvoted, but it's extremely unlikely you'll end up owing more than 100%.
I'm not an accountant but having filed multi-jurisdiction tax returns myself I don't see a mechanism by which this could happen.
I'm not an accountant but having filed multi-jurisdiction tax returns myself I don't see a mechanism by which this could happen.
I edited my comment, since 70% tax rate is actually possible depending on the tax rate of the country you're living and whether they have a tax treaty with the US or not.
You’d still be able to credit foreign taxes paid against any US tax owing, on income anyway, treaty or not.
Where you get screwed is when countries have different philosophies on things. E.g. Canada doesn’t tax gains on your home, but you can’t write off mortgage interest on your taxes. Meanwhile USA taxes gains on your home but lets you deduct mortgage interest.
If you’re a dual citizen living in Canada, you pay both.
Or if you live in a country with predominantly sales taxes and no income taxes, well, now you get to pay lots of sales taxes and US income taxes.
Where you get screwed is when countries have different philosophies on things. E.g. Canada doesn’t tax gains on your home, but you can’t write off mortgage interest on your taxes. Meanwhile USA taxes gains on your home but lets you deduct mortgage interest.
If you’re a dual citizen living in Canada, you pay both.
Or if you live in a country with predominantly sales taxes and no income taxes, well, now you get to pay lots of sales taxes and US income taxes.
Not only the US, but if you've ever claimed residence in California, they might decide to tax you for foreign income as well (if you accidentally leave any part of your life there behind when you move on, for example, leave a car registered there, or keep medical records with your doctor, even visit family there too often)! So add another potential 14% for high earners.
[deleted]
I registered this account to make this post in the hope that it helps readers of HN and others.
Under U.S. law, citizenship and nationality are two different things. The common refrain, well-established and reified by no less a body than the Supreme Court, is, "All citizens are nationals, but not all nationals are citizens." In other words, the set of U.S. citizens is a subset of the set of U.S. nationals. (The set of U.S. nationals is itself is a subset of the set of U.S. persons; viz. U.S. entities such as corporations or LLC's are U.S. persons but not U.S. nationals.) The rights and privileges, and duties and obligations, conferred on the two groups, U.S. citizens and U.S. nationals, substantially overlap, but do not coincide. Both U.S. citizens and nationals have the right to enter or exit the United States of America at any time and for any reason, both have the right to reside indefinitely, and both are authorized to work without restriction. In general, U.S. citizenship confers all of the features of U.S. nationalship, plus some; U.S. nationals are barred from certain activities, such as voting in federal elections and, generally, are exempt from being called to serve on a jury.
The author of this article found her U.S. citizenship to be too burdensome to maintain, and therefore relinquished her U.S. nationality, thereby indirectly relinquishing her U.S. citizenship. Was this necessary? You will notice that the IRS claims the authority to tax (a) the income of U.S. persons (which includes U.S. citizens, U.S. nationals, U.S. entities such as corporations or LLC's, and non-citizen and non-national residents), and (b) the worldwide income of U.S. citizens.
But does the IRS claim the authority to tax the worldwide income of non-U.S. citizen, non-U.S. persons...such as non-resident U.S. nationals?
It really makes you think.
Under U.S. law, citizenship and nationality are two different things. The common refrain, well-established and reified by no less a body than the Supreme Court, is, "All citizens are nationals, but not all nationals are citizens." In other words, the set of U.S. citizens is a subset of the set of U.S. nationals. (The set of U.S. nationals is itself is a subset of the set of U.S. persons; viz. U.S. entities such as corporations or LLC's are U.S. persons but not U.S. nationals.) The rights and privileges, and duties and obligations, conferred on the two groups, U.S. citizens and U.S. nationals, substantially overlap, but do not coincide. Both U.S. citizens and nationals have the right to enter or exit the United States of America at any time and for any reason, both have the right to reside indefinitely, and both are authorized to work without restriction. In general, U.S. citizenship confers all of the features of U.S. nationalship, plus some; U.S. nationals are barred from certain activities, such as voting in federal elections and, generally, are exempt from being called to serve on a jury.
The author of this article found her U.S. citizenship to be too burdensome to maintain, and therefore relinquished her U.S. nationality, thereby indirectly relinquishing her U.S. citizenship. Was this necessary? You will notice that the IRS claims the authority to tax (a) the income of U.S. persons (which includes U.S. citizens, U.S. nationals, U.S. entities such as corporations or LLC's, and non-citizen and non-national residents), and (b) the worldwide income of U.S. citizens.
But does the IRS claim the authority to tax the worldwide income of non-U.S. citizen, non-U.S. persons...such as non-resident U.S. nationals?
It really makes you think.
Makes me think that your best bet is to find a lawyer with this domain knowledge or (more craftfully) become a lawyer with this knowledge and charge ann exorbitant but less than double tax fee to consult others how to achieve this.
ELI5 why she renounced her citizenship? Not getting it from that post, a 3 minute wander on her site and the FATCA Wikipedia page.
If you’re a US citizen living in another country you’ll find many banks and financial institutions decline to have you as a client because dealing with FATCA makes it far more trouble than it’s worth. No other developed country makes similar demands.
And yet the pandora papers aren't getting much coverage in the US because there aren't that many Americans named in them. Gotta wonder if the two are connected.
Actually the US has many ways to hide your assets (just looks at the South Dakota trust system). Look at the pandora papers and you'll see a lot of people hiding their assets in the uSA.
But like wouldn’t you be fine once you found one?
No, even if you can open a bank account as a US citizen, most services will be restricted. If you want to get a life insurance, they won't have anything for you, if you want to open an investment account, same issue, etc...
So, first it's difficult to find banks that'll even accept US citizens and then once you do, it can still be very restrictive.
So, first it's difficult to find banks that'll even accept US citizens and then once you do, it can still be very restrictive.
that does sound like a hassle.
Is dual citizenship any help with this issue?
Say you're a dual US / German citizen. Will that help a German bank more easily bank with you? Do you even have to disclose to the bank that you're a dual citizen, or can you simply present yourself as a German citizen?
Say you're a dual US / German citizen. Will that help a German bank more easily bank with you? Do you even have to disclose to the bank that you're a dual citizen, or can you simply present yourself as a German citizen?
Doesn’t matter, all that counts is if you are a “US Person”:
https://www.irs.gov/individuals/international-taxpayers/clas...
Whether the bank finds out or not is maybe another thing, but in principle what matters is if you count as a US Person.
https://www.irs.gov/individuals/international-taxpayers/clas...
Whether the bank finds out or not is maybe another thing, but in principle what matters is if you count as a US Person.
In my experience, US tax residency (as a solely German citizen) is enough for German and Swiss banks to cancel services. So dual citizenship likely won't help.
You may misrepresent your tax status towards the bank, but I'd assume that takes you on risky grounds, legally.
You may misrepresent your tax status towards the bank, but I'd assume that takes you on risky grounds, legally.
It depends.
Some countries won’t let banks refuse to open an account.
I’m sure some people lie to their bank (or continue to hold accounts from before they would ask these questions). But it’s more complicated if your place of birth is USA. But that could be bypassable too if you have the right documents.
Some countries won’t let banks refuse to open an account.
I’m sure some people lie to their bank (or continue to hold accounts from before they would ask these questions). But it’s more complicated if your place of birth is USA. But that could be bypassable too if you have the right documents.
I haven't run into much trouble, though maybe I just got lucky with Nordea.
oh ha. somehow thought it was much more sinister
Filling out tax forms and FBAR requirements were a pain.
Americans living in other countries don't want to pay taxes anymore. Apparently the only option is to stop being an American, which she has decided to do.
It is not about paying taxes as its likely she was not paying any to the US. This is what the unique tax treaties cover. You still however have to prove this every year.
One of the worst parts about this situation is the difficulty in investing from abroad. Can't buy US ETFs/Mutual funds because they don't report properly abroad and can't buy foreign ETFs/Mutual funds because they don't want to report to US. This is a totally unnecessary financial burden on US Expats.
One of the worst parts about this situation is the difficulty in investing from abroad. Can't buy US ETFs/Mutual funds because they don't report properly abroad and can't buy foreign ETFs/Mutual funds because they don't want to report to US. This is a totally unnecessary financial burden on US Expats.
>I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands.
Apparently she wasn't paying taxes (to the US) anyways.
Apparently she wasn't paying taxes (to the US) anyways.
Then I'm even less clear on what her issues were. Somehow this is reminding me of that girl that took $350,000 in debt to get a Theater Management degree from Duke University and then blogged about how criminal the American higher education system is and how she was running off to Russia with her husband to escape the crippling debt.
It's like, you took almost half a mil in debt to go to a PRIVATE SCHOOL to get a degree that you would have no hope of ever using to pay back your _crippling debt_. Student load debt is a real problem in USA..but that's not it.
It's like, you took almost half a mil in debt to go to a PRIVATE SCHOOL to get a degree that you would have no hope of ever using to pay back your _crippling debt_. Student load debt is a real problem in USA..but that's not it.
The understanding I came away with from skimming was it had to do with an ideological railing against the FATCA reporting requirements. And shame; lots of shame.
> Then I'm even less clear on what her issues were
I think the issues are pretty simple; if you are a US citizen but living and working in another country permanently with no US local income, she found the impact of FACTA and tax reporting obligations to be too expensive and or pain-in-the-butt to make it worth keeping her US citizenship.
There are very real impacts and constraints on ex-pats in this situation; whether or not they are worth it to you is a personal evaluation I suppose.
This is nothing like the schoold debt issue you describe.
I think the issues are pretty simple; if you are a US citizen but living and working in another country permanently with no US local income, she found the impact of FACTA and tax reporting obligations to be too expensive and or pain-in-the-butt to make it worth keeping her US citizenship.
There are very real impacts and constraints on ex-pats in this situation; whether or not they are worth it to you is a personal evaluation I suppose.
This is nothing like the schoold debt issue you describe.
Ah OK. So now it makes sense why this woman renounced her USA citizenship
She wanted to still be an American, but didn't want to do the yearly paperwork to keep her citizenship.
Got it.
She wanted to still be an American, but didn't want to do the yearly paperwork to keep her citizenship.
Got it.
It's not just your paperwork. In many countries you'll be denied seemingly basic financial services by institutions because FACTA would make their paperwork too much hassle.
OK then she should just keep being an American. Right?
I'm wondering why you're being so judgmental of this woman. What offends you so much about her legitimate decision to do this? You might not agree with her reasons, but are you really in a place to decide that her feelings, frustrations and her decision are invalid and inconsequential? It's not like she's antivaxx. This doesn't hurt anybody. How about seeking to understand instead being so argumentative over nothing?
Renouncing citizenship makes that all go away. Her call.
Paying $1,000 a year to file a form that says you don't owe taxes doesn't seem like a problem to you?
I'm amused by her complaint that overseas Americans' votes are few and far between and thus she doesn't feel represented combined with her "no taxation without representation" quip.
Just because you don't belong to a group that has enough power to force the changes YOU want doesn't mean that you aren't being represented. I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.
Just because you don't belong to a group that has enough power to force the changes YOU want doesn't mean that you aren't being represented. I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.
As a Swiss citizen living abroad I can participate in Swiss votations and I am represented by the Council of Swiss Abroad: https://www.swisscommunity.org/en/voting-co-determination/th....
That makes sense to me that expatriates have some level of representation to defend their interests.
And of course I only have to pay taxes in the country where I live. US citizens living abroad seem to have it way more difficult than we do.
That makes sense to me that expatriates have some level of representation to defend their interests.
And of course I only have to pay taxes in the country where I live. US citizens living abroad seem to have it way more difficult than we do.
> I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.
Having disproportional political power based on residency is central to the American political system. What you probably don't understand is her particular preference as to how that disproportionality is arranged.
Having disproportional political power based on residency is central to the American political system. What you probably don't understand is her particular preference as to how that disproportionality is arranged.
But isn't this the same refrain you hear stateside as well? "I don't feel represented by the system".
It reminds me of Chappelle's "Since when did America give a ** about any of us?"
It reminds me of Chappelle's "Since when did America give a ** about any of us?"
>I have no idea why any single person would expect to have a disproportionate amount of power simply because of where they don't live.
What about the residents of Washington D.C.?
What about the residents of Washington D.C.?
It is very well written and resonates with a lot of Americans emigrants. As a spouse and mother of American emigrants for now more than 20 years, I have seen the situation degrading year after year. Every administration made it more penalizing for American emigrants. Writing to representatives or going to Washington to bring awareness of our situation didn’t help. If you got an answer it was a standardized letter not addressing the issue.thank you!
> then charging me $2350 to file the divorce papers.
So, if I understand correctly, the very fact that I was squirted out here in this country puts me at a -$2350 just for being born.
So US citizenship = -$2350
So, if I understand correctly, the very fact that I was squirted out here in this country puts me at a -$2350 just for being born.
So US citizenship = -$2350
Yes, and if you aren’t 5 years tax compliant when you pay that $2350 you owe 20% of the value of all your assets too.
Really? you were squirted out into a modern society managed by modern government institutions. Ignoring the fact that you’re discounting the miracle of life, you certainly took advantage of more than $2350 of services upon birth. Security, med school funding, Medicare hospital funding, road infrastructure…
You're assuming that the person in this scenario ever actually lived in the US. You can get an American citizenship without ever actually living there, which will then just make your life harder and if you want to make your life easier, that'll be $2350.
They walk the earth under the protection of the US government. Anywhere anytime they need it, uncle sam will save them, or bomb the shit out of anyone that dares harms them.
A very cheap lifetime insurance policy for $2350.
Civis romanus sum
A very cheap lifetime insurance policy for $2350.
Civis romanus sum
This is a myth. It is not true. There are many cases where the US has deemed it not worth it to rescue a handful of citizens.
>There are many cases where the US has deemed it not worth it
And there are many cases where they have. This guy certainly got his $2,000 worth when Seal Team 6 swooped in, killed a bunch of people and rescued him. https://www.independent.co.uk/news/world/americas/us-electio...
Trump administration had over the years rescued 55 hostages in 24 countries. Their only qualification of rescue, being american citizens.
> This is a myth. It is not true.
Thus it is true, and it is not a myth.
And there are many cases where they have. This guy certainly got his $2,000 worth when Seal Team 6 swooped in, killed a bunch of people and rescued him. https://www.independent.co.uk/news/world/americas/us-electio...
Trump administration had over the years rescued 55 hostages in 24 countries. Their only qualification of rescue, being american citizens.
> This is a myth. It is not true.
Thus it is true, and it is not a myth.
They were implying it is a myth that the US gov WILL decide to help you, not MIGHT decide to help you. A lottery ticket is not an insurance policy.
They still take advantage of the citizenship no matter where they are.
People waste more money on lottery tickets.
People waste more money on lottery tickets.
Not claiming that I know enough about FATCA to comment in an informed way, but Patrick Boyle did a recent video on the Pandora Papers, which has a brief discussion about FATCA and how it compares to other nations' laws, around the 21 minute mark: https://www.youtube.com/watch?v=INRs9rnciyI
Absolutely!
US citizenship essentially became IRS trap.
US citizenship essentially became IRS trap.
The shitty thing is the US is generally OK with its citizens living abroad, and even encourages it.
Then in a completely separate line of decision making decides to make the lives abroad unnecessarily difficult.
Then in a completely separate line of decision making decides to make the lives abroad unnecessarily difficult.
[deleted]
> I realize that I still believe in the basic strength of the US democratic system: it will survive whoever wins the presidential election, for example.
Will it? It barely survived 4 years of Trump. If he gets another crack at it he'll know exactly where to strike to bring it down.
Will it? It barely survived 4 years of Trump. If he gets another crack at it he'll know exactly where to strike to bring it down.
The US doesn't like losing tax cattle.
She wasn't paying taxes. And it costs more in enforcement than it brings in taxes anyway.
The US expects you to pay your bar tab before you peel out of the parking lot.
No, this goes much further than that. They also want a slice of all the other bar tabs that you will run up in the future abroad.
The author of the article in question very specifically complains about having to settle up her tax bill and fix her tax accounting before she's allowed to renounce her citizenship, like this was some massive travesty of justice.
She also doesn't complain about paying taxes, but having her accounts reported to the IRS, and having to disclose the fact that she has access to funds in accounts not in her name....as well as not being as represented as she feels she should be from said taxation.
She also doesn't complain about paying taxes, but having her accounts reported to the IRS, and having to disclose the fact that she has access to funds in accounts not in her name....as well as not being as represented as she feels she should be from said taxation.
That's a very small detail, there are a whole slew of posts on this subject, why pick out that one item?
I think she should have become a Dutch citizen. Why was it necessary to hang on to her American citizenship when she reasonably could be assumed to have no intention of returning? I’m surprised some countries don’t require a longterm resident to apply for citizenship.
I was hoping to read something about the crimes the US government has committed (of which there are an endless list) or another reason to feel a deep regret and bitterness at being betrayed by the country, but it's just banking and tax annoyances.
(2016)
[deleted]
KennyBlanken(2)
Rachel isn’t any better than the restauranteur displaying a “no blacks” sign. It’s not cool to block entire countries from your blog just because.
> FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime.
Come on, it's your bank account numbers, that's only because the US government already knows what your account numbers are.
> I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands.
If I had to pay $1000 to an accountant, I'd probably learn how to do the forms myself.
Come on, it's your bank account numbers, that's only because the US government already knows what your account numbers are.
> I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands.
If I had to pay $1000 to an accountant, I'd probably learn how to do the forms myself.
I did the tax forms myself when living abroad, precisely because I didn't earn enough income to afford the $1000 cost (in fact, it was perhaps twice this, in Switzerland, based on my cursory Googling at the time). It routinely took over a week of working days, which was only possible because I had a sympathetic boss and generous vacation time.
It's also quite stressful, since there are many ambiguous questions, most of the proprietary tax software is ill-equipped to consider the situation of an American living abroad, and a wrong answer can subject you to audit.
It's also quite stressful, since there are many ambiguous questions, most of the proprietary tax software is ill-equipped to consider the situation of an American living abroad, and a wrong answer can subject you to audit.
What are the consequences to not filing? My wife is a US citizen, and she hasn't filed for two years. I've met other US citizens that don't file either. So far I have not heard of any issues relating to not filing.
The issue is that the US can determine she didn’t file, file for her, and assess fines/tax. Once that gets to $50k she can’t renew her passport, and can no longer enter or leave the US as the law states she can’t use her foreign passport if a US citizen. If she lives in a country that assists the IRS with collection, they can reach in and take it. They have all her bank details from FBAR filing.
I know a US citizen who hasn’t filed in 34 years. I wonder what the penalty would look like if she ever takes a job in the US again.
Does she earn much? If her income is low enough, she may be exempt from filing.
https://www.hrblock.com/tax-center/income/other-income/how-m...
(Note that I am not a tax professional and you should not rely on anything I say.)
https://www.hrblock.com/tax-center/income/other-income/how-m...
(Note that I am not a tax professional and you should not rely on anything I say.)
It doesn't matter. If she has bank accounts abroad exceeding the threshold, she's obliged to file just to disclose her foreign bank accounts.
Eventual expat here (clock is running on citizenship elsewhere through an investment program). I would not recommend filing your taxes yourself if you're a non-US resident with citizenship. It's cumbersome because of mechanizations to prevent tax evasion. There's room for improvement, but expats have very little pull congressionally in getting reform done to improve the experience. These fees should also be made deductible (tax prep fees no longer are).
With that said, $1k annually is a small price to pay to maintain your US citizenship through annual tax filings. The benefits (imho) outweigh the cost (employment access, residency, repatriation).
Tangentially, this sounds like a startup opportunity.
With that said, $1k annually is a small price to pay to maintain your US citizenship through annual tax filings. The benefits (imho) outweigh the cost (employment access, residency, repatriation).
Tangentially, this sounds like a startup opportunity.
it's extremely easy to file the FBAR forms. and the rest are standard tax forms, and you even get to file later. I lived abroad and ran a US and Argentine company and had 2 accountants and a bookkeeper, so it can get complex when you have a lot of employees, but for the first few years abroad, when it was just me doing remote consulting, i just did it myself and it's not difficult.
It isn’t complicated to file FBAR, but why should we have to give all our bank account details to the US when citizens living there would only have to under criminal investigation? Also if the US decides you are owing taxes/fines and you live in a country that assists the IRS with collection, they have all your account details.
The penalties for making a mistake are such that you would be a fool to take the risk to save $1,000.
The Foreign Earned Income Exclusion is USD 107,600. If you make less than that, then the forms (Form 2555) are pretty easy.
If you make more, Form 1116 can be a pain to get right but if you have an accountant do it once you can figure out how to modify the form for subsequent years.
If you make more, Form 1116 can be a pain to get right but if you have an accountant do it once you can figure out how to modify the form for subsequent years.
As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.
What a whiny and melodramatic series of posts from a privileged person giving up one first class citizenship for another out of economics and convenience.
Many of my compatriots wait longer, pay less in absolute but more in relative terms and celebrate afterwards.
Lots of us would do well to be more grateful.
Many of my compatriots wait longer, pay less in absolute but more in relative terms and celebrate afterwards.
Lots of us would do well to be more grateful.
Is it whiny and melodramatic to want banking and investment services in your country of residence?
Is it whiny and melodramatic to want to be able to utilize the retirement savings plans of your country of residence?
This isn’t just economics and convenience. It is basic living and Americans abroad are treated like second class citizens relative to those of other countries.
Is it whiny and melodramatic to want to be able to utilize the retirement savings plans of your country of residence?
This isn’t just economics and convenience. It is basic living and Americans abroad are treated like second class citizens relative to those of other countries.
Yes, it's true that all these things are important and there is nothing bad with wanting them.
But lot of people are treated like second class citizens because of their passport in Netherlands (or in America, for that reason). There are a lot of people who get treated worse in their native countries. And her story is nothing out of ordinary.
Sure, it might be hard to get a bank account opened. But on the other hand, she most likely could travel to Netherlands without a visa -- this is very difficult, expensive and time-consuming process for the rest of us. I dare say the paperwork to just to get a work visa for a citizen of most countries in the world is probably greater than her taxes forms (and they also include information about the source of the money, by the way).
Also, where I'm from, lots of young men would love to renounce their nationality just to avoid conscription. We don't have the chance: you need to have another country's citizenship just to renounce yours.
So being in a position when you just can renounce your nationality is a great privilege, and I don't see her acknowledging that.
The whole system with citizenships and visas is severely broken, and she is not the one who is harmed the most. So it's difficult to empathise with someone who has it much easier than we do.
But lot of people are treated like second class citizens because of their passport in Netherlands (or in America, for that reason). There are a lot of people who get treated worse in their native countries. And her story is nothing out of ordinary.
Sure, it might be hard to get a bank account opened. But on the other hand, she most likely could travel to Netherlands without a visa -- this is very difficult, expensive and time-consuming process for the rest of us. I dare say the paperwork to just to get a work visa for a citizen of most countries in the world is probably greater than her taxes forms (and they also include information about the source of the money, by the way).
Also, where I'm from, lots of young men would love to renounce their nationality just to avoid conscription. We don't have the chance: you need to have another country's citizenship just to renounce yours.
So being in a position when you just can renounce your nationality is a great privilege, and I don't see her acknowledging that.
The whole system with citizenships and visas is severely broken, and she is not the one who is harmed the most. So it's difficult to empathise with someone who has it much easier than we do.
Broadly speaking, citizens of developed countries are unaware of the hurdle visas really are.
I had a friend complain pretty vehemently because their Ukrainian partner had to get a visa to go to a country.
I then had to explain that for most of the rest of the world going to most countries requires a visa, and that my passport at that moment was at an embassy for a visa application.
I also had to point out that it is in fact possible that your visa might get rejected so then all you've booked for your trip is potentially wasted.
I had a friend complain pretty vehemently because their Ukrainian partner had to get a visa to go to a country.
I then had to explain that for most of the rest of the world going to most countries requires a visa, and that my passport at that moment was at an embassy for a visa application.
I also had to point out that it is in fact possible that your visa might get rejected so then all you've booked for your trip is potentially wasted.
Whiny and melodramatic is the tone.
Banking and investment and retirement are entirely economical reasons.
Convenience is not wanting to file taxes, etc.
Banking and investment and retirement are entirely economical reasons.
Convenience is not wanting to file taxes, etc.
Agreed. US citizenship is probably the luckiest lottery ticket on earth. People literally die trying to get it. And she just brushes it off for the sake of paperwork.
Astounding.
Astounding.
Honestly I find it pretty fucked up that someone would renounce their citizenship "for convenience". I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy.
Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular services of their country of origin every now and then, benefit from its diplomatic protection, and can return any time if circumstances require it (implying they should be contributing to keeping the country safe and functional in the meantime, call it an insurance policy if you will), and probably many other benefits I'm not thinking of. Some countries will even send special forces abroad to recover citizens in danger.
So yeah apparently the practicalities of it suck sometimes (and that should definitively be improved) but in principle it's not as outlandish as it sounds, imo.
Regarding the taxation when living abroad, doesn't it actually make sense? Sure it sounds like an oddity because the US are the only to do it, but most emigrants I know still use the consular services of their country of origin every now and then, benefit from its diplomatic protection, and can return any time if circumstances require it (implying they should be contributing to keeping the country safe and functional in the meantime, call it an insurance policy if you will), and probably many other benefits I'm not thinking of. Some countries will even send special forces abroad to recover citizens in danger.
So yeah apparently the practicalities of it suck sometimes (and that should definitively be improved) but in principle it's not as outlandish as it sounds, imo.
It would have sounded ridiculous to me too had I not lived it. It’s the tax compliance, not the paying of taxes that is the issue. Most of us will never pay, we already pay more in the country we live in. The tax compliance enforcement costs the US far more than it makes in collecting taxes from citizens overseas, and other countries refuse to allow dual citizens to open accounts or invest. There are MASSIVE, and I’m talking tens of thousands of dollars in fines that can be assessed if you are overseas a file a form too late. And it’s difficult for a specialist accountant to work it all out, let alone a regular person. It’s the anxiety of not knowing what is coming next.
If there were a fee for living overseas and having the option of using consular assistance, sure I’d be happy to pay it.
If you live more or less any other industrialized country, and work there, you will owe the US ZERO in taxes because you pay more to the country where you are resident (and perhaps a citizen).
The complaint is not about having to pay taxes to reflect your status, it's about having to pay accountants etc. to complete forms that show you don't owe any tax to the US.
The complaint is not about having to pay taxes to reflect your status, it's about having to pay accountants etc. to complete forms that show you don't owe any tax to the US.
Why wouldn't a country mean little to someone, even if it is a democracy? I live in the United States, and any theoretical vote I give is completely worthless unless I would move to Maine, and even then it's still not worth much. I move out of the United States, my vote is still worthless. I get citizenship elsewhere, my vote might have a chance at value.
The United States doesn't actually do much for its citizens; it's the states that do things for citizens, and if you're not in a good state, you get no real value from the United States or any part of your country. It wasn't always this way, but it's been this way for as long as I've been alive.
Sentiment is overrated and irrational if the country's never given you anything, and the United States just doesn't give anything to a substantial volume of its citizens.
A common argument is that the United States gives the right to free speech, or to guns, or to varying abstract concepts, but it would also give this even if everyone stopped paying their taxes and the United States was unable to enforce anything.
I'm a big fan of taxation, and of most laws. The US, though, really doesn't do anything with it that has ever benefit me.
The poster really does seem like, if anything, she cares too much for the country.
The United States doesn't actually do much for its citizens; it's the states that do things for citizens, and if you're not in a good state, you get no real value from the United States or any part of your country. It wasn't always this way, but it's been this way for as long as I've been alive.
Sentiment is overrated and irrational if the country's never given you anything, and the United States just doesn't give anything to a substantial volume of its citizens.
A common argument is that the United States gives the right to free speech, or to guns, or to varying abstract concepts, but it would also give this even if everyone stopped paying their taxes and the United States was unable to enforce anything.
I'm a big fan of taxation, and of most laws. The US, though, really doesn't do anything with it that has ever benefit me.
The poster really does seem like, if anything, she cares too much for the country.
I've always wondered how people in the green card immigration queue, sometimes estimated to take 20 years until their turn, feel when they read someone like you failing to value the country they live in at all.
Probably skeptic, because they lived elsewhere, got an education for relatively inexpensive or free, and all they see is the difference in the value of currency.
Or probably skeptic, because they're planning on moving to a good state.
Or most probably, they don't care. They're moving countries, they probably don't have the most nationalistic bent to them.
I don't hate the United States, I'm just not being unrealistic about how beneficial it's been for me.
Or probably skeptic, because they're planning on moving to a good state.
Or most probably, they don't care. They're moving countries, they probably don't have the most nationalistic bent to them.
I don't hate the United States, I'm just not being unrealistic about how beneficial it's been for me.
> I can't really comprehend how their country could mean so little to someone, especially when that country is a democracy.
Maybe that's what happens when someone means so little to their country?
Maybe that's what happens when someone means so little to their country?
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Her essentially 3 reasons for renouncing essentially and my responses:
>I could vote in the US, but no one represents the needs of US citizens abroad because our votes are dispersed over all 50 states.
* there's hundreds of millions of people and only two parties in the U.S. no one represents anybodies needs well
>I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. FATCA strong-arms our local banks into handing over our private financial information as well. It treats my local accounts as being equivalent to hiding money overseas.
* Taxes and the FATCA issues....to me and I'm sure billions of other people: $1000$ bucks a year is well worth it for a U.S. citizenship...Turning over financial records of the non-American spouse...this one doesn't add up, just do Married Filing Separately status in tax return.
>Without an address in the US, I can’t open an investment account there; with US nationality, it is becoming more and more difficult to do any investment or borrowing outside of the US.
* this doesn't make sense. Why would having a citizenship affect if a Dutch bank loaned you money as long as your credit score was good?
The reasons she gives don't make sense to me...something feels off here.
>I could vote in the US, but no one represents the needs of US citizens abroad because our votes are dispersed over all 50 states.
* there's hundreds of millions of people and only two parties in the U.S. no one represents anybodies needs well
>I pay almost $1000 per year to an accountant to fill out the forms—more and lengthier than they’d be if I lived in the US—only to prove I owe nothing, since I pay taxes here in the Netherlands. FATCA forces me to hand over my private financial information, as well as my non-American husband’s, to an extent that homeland Americans don’t have to unless they’re suspected of a crime. FATCA strong-arms our local banks into handing over our private financial information as well. It treats my local accounts as being equivalent to hiding money overseas.
* Taxes and the FATCA issues....to me and I'm sure billions of other people: $1000$ bucks a year is well worth it for a U.S. citizenship...Turning over financial records of the non-American spouse...this one doesn't add up, just do Married Filing Separately status in tax return.
>Without an address in the US, I can’t open an investment account there; with US nationality, it is becoming more and more difficult to do any investment or borrowing outside of the US.
* this doesn't make sense. Why would having a citizenship affect if a Dutch bank loaned you money as long as your credit score was good?
The reasons she gives don't make sense to me...something feels off here.
It’s clear from your response that you’re not at all familiar with the issues here. I’m a bit confused as to why you’d feel the need to share your opinion on a topic where you’re very clearly not well informed.
As an American expat for five years, I can assure you her complaints are accurate. 1. Not remotely the same. As a resident of a particular state, your senators and congresspeople are certainly looking out for your state’s interests. As an expat, almost nobody cares. 2. FATCA doesn’t care how you file. If you’re married, your spouse is included. 3. Most investment banks will no longer accept expats as clients, and go so far as to monitor and close accounts for people consistently logging in from overseas. When we lived abroad we had to be very careful with VPNs, and often had our US-resident parents monitor our accounts for us just in case.
As an American expat for five years, I can assure you her complaints are accurate. 1. Not remotely the same. As a resident of a particular state, your senators and congresspeople are certainly looking out for your state’s interests. As an expat, almost nobody cares. 2. FATCA doesn’t care how you file. If you’re married, your spouse is included. 3. Most investment banks will no longer accept expats as clients, and go so far as to monitor and close accounts for people consistently logging in from overseas. When we lived abroad we had to be very careful with VPNs, and often had our US-resident parents monitor our accounts for us just in case.
> It’s clear from your response that you’re not at all familiar with the issues here
Im NOT! I'm trying to understand it.
It appears that she's giving up her citizenship so she doesn't have to use a VPN and has a better selection of banks and to avoid paying $1000 a year?
Seems like a citizenship is worth WAY more than that!
Something doesn't add up here!
Or do people with a lot of money just have a lot less tolerance for inconveniences than average moneyed people?
Im NOT! I'm trying to understand it.
It appears that she's giving up her citizenship so she doesn't have to use a VPN and has a better selection of banks and to avoid paying $1000 a year?
Seems like a citizenship is worth WAY more than that!
Something doesn't add up here!
Or do people with a lot of money just have a lot less tolerance for inconveniences than average moneyed people?
It genuinely is far more invasive and frustrating than you'd expect.
I'm a dual US/UK citizen, living in the UK for four years. I have been turned away from local banks for being American. I have also had American banks and brokerages unilaterally terminate my prior accounts for moving abroad. I cannot reasonably purchase local life insurance policies nor mutual funds without tripping over IRS regulations that strip them of any preferential tax treatment and impose unimaginably onerous reporting requirements (PFIC).
As a dual citizen, you would think I could just bank with my British passport and conceal my American citizenship. Except foreign banks in countries with normal diplomatic relations with America are required to proactively search their customer database for indications of potential American citizens, report their details, and possibly preventatively withhold 30% of all payments to those accounts (FATCA). This is a right pain in the ass, so those institutions will often preemptively exclude customers who seem too American from the outset.
I have to rigorously report the highest monthly balance / value of every single one of my foreign assets and accounts, every year, to both the IRS and FinCEN, on entirely separate and incompatible forms.
And I get to pay thousands of dollars a year for the pleasure of being locked out of basic financial vehicles (life insurance policies!) and proving to Uncle Sam that I don't owe him anything. It's especially galling because this kind of reporting and taxation for foreign-domiciled citizens is unique to America, at least of developed countries.
Not to mention that all of this joy, and more, extends to your spouse, regardless of their citizenship.
I keep doing it, year after year, because I still believe in America. But after a few years without stepping on American soil, the question why am I still doing this comes of its own accord.
I'm a dual US/UK citizen, living in the UK for four years. I have been turned away from local banks for being American. I have also had American banks and brokerages unilaterally terminate my prior accounts for moving abroad. I cannot reasonably purchase local life insurance policies nor mutual funds without tripping over IRS regulations that strip them of any preferential tax treatment and impose unimaginably onerous reporting requirements (PFIC).
As a dual citizen, you would think I could just bank with my British passport and conceal my American citizenship. Except foreign banks in countries with normal diplomatic relations with America are required to proactively search their customer database for indications of potential American citizens, report their details, and possibly preventatively withhold 30% of all payments to those accounts (FATCA). This is a right pain in the ass, so those institutions will often preemptively exclude customers who seem too American from the outset.
I have to rigorously report the highest monthly balance / value of every single one of my foreign assets and accounts, every year, to both the IRS and FinCEN, on entirely separate and incompatible forms.
And I get to pay thousands of dollars a year for the pleasure of being locked out of basic financial vehicles (life insurance policies!) and proving to Uncle Sam that I don't owe him anything. It's especially galling because this kind of reporting and taxation for foreign-domiciled citizens is unique to America, at least of developed countries.
Not to mention that all of this joy, and more, extends to your spouse, regardless of their citizenship.
I keep doing it, year after year, because I still believe in America. But after a few years without stepping on American soil, the question why am I still doing this comes of its own accord.
Thanks. This explains it a little, but still seems like a huge gamble to give up one's citizen ship to the largest superpower in the world.
I'd rather just use a VPN and lie to get around the bullshit if possible.
You're literally not doing anything wrong by wanting to keep the money you have to support yourself and your family... the laws are just stupid and extremely unfair.
I'd rather just use a VPN and lie to get around the bullshit if possible.
You're literally not doing anything wrong by wanting to keep the money you have to support yourself and your family... the laws are just stupid and extremely unfair.
> I have also had American banks and brokerages unilaterally terminate my prior accounts for moving abroad
Was it Vanguard or Charles Schwab? Did they give a notice before terminating the accounts?
Was it Vanguard or Charles Schwab? Did they give a notice before terminating the accounts?
In many EU countries, to have a telephone line (land or mobile). The same with internet access: you must have a bank account. But most local banks do not want local US customers. It's prohibitively onerous for them. Imagine trying to establish a life without a telephone or internet.
You can't open a bank account with just a VPN. You also need an address in the US. And even if you do, how do you get money into that account? Do you think your employer in the Netherlands would match your 401(k) deposits?
There's tons of ways to get an address in the U.S. several digitally.
You can transfer money into that account via digital transfer?
OF course your Netherlands employer won't match 401k, they prob don't even know what that is.
Will they match it a 401k if you GIVE UP your citizenship?
Doesn't make sense.
You can transfer money into that account via digital transfer?
OF course your Netherlands employer won't match 401k, they prob don't even know what that is.
Will they match it a 401k if you GIVE UP your citizenship?
Doesn't make sense.
Right, there are retirement/pension investments for Dutch/EU nationals which she is not eligible for because of her status as a US person (in the eyes of the SEC).
So, long story short, she's ineligible for investing as a US national unless she jumps through hoops to maintain a US address and appears to reside in the US. Meanwhile, she's ineligible for investing as a Dutch national because EU brokers won't deal with US nationals. Limbo.
So, long story short, she's ineligible for investing as a US national unless she jumps through hoops to maintain a US address and appears to reside in the US. Meanwhile, she's ineligible for investing as a Dutch national because EU brokers won't deal with US nationals. Limbo.
>As a resident of a particular state, your senators and congresspeople are certainly looking out for your state’s interests.
You've apparently forgotten a whole lot in your five years as an expat.
You've apparently forgotten a whole lot in your five years as an expat.
You mentioned it. FATCA is not targeting US citizens abroad, it's targeting financial organisations who have US citizens as clients. So, many banks around the world will have "Are you a US citizen" as one of the first questions to open an account, and if the answer is yes, they will politely decline any further requests.
Are there NO workarounds?
I noticed you said 'many' and not 'all' banks.
It looks like these banks work for expats.
https://dutchreview.com/expat/best-banks-expats-netherlands/
Something doesn't add up.
From a non rich persons perspective it appears that person gave up her citizenship so she could essentially have a better selection of banks and to not have to use a VPN?
It seems like a US citizenship is worth it?
The actual real problems are not clear to me.
I noticed you said 'many' and not 'all' banks.
It looks like these banks work for expats.
https://dutchreview.com/expat/best-banks-expats-netherlands/
Something doesn't add up.
From a non rich persons perspective it appears that person gave up her citizenship so she could essentially have a better selection of banks and to not have to use a VPN?
It seems like a US citizenship is worth it?
The actual real problems are not clear to me.
That page describes the situation for expats in general. It's different for U.S. citizens.
Bunq, the first bank that's listed, has special requirements: https://together.bunq.com/d/2318-why-are-there-special-regul...
With an SSN you can open a basic checking and savings account. However, you'll be denied for any type of investments. This also means U.S. citizens can't participate in pension plans of Dutch employees.
Even local crypto exchanges are refusing service: https://bitonic.nl/en/faq/33/what-is-a-us-person
Meanwhile, banks and brokers in the U.S. require a permanent residential address. For example, Wealthfront states they don't "support clients residing outside of the U.S., including U.S. citizens residing abroad".
Additionally, The Netherlands has a wealth tax. Even on unrealized gains. Each year you pay taxes on stocks you haven't sold yet. Then, when you actually do sell, you can't use the previous years of Dutch taxes that you've paid to offset the U.S. capital gains tax.
It's especially complicated for so called Accidental Americans. Many of whom don't have or know their SSN. To get one you must submit your birth certificate and US passport. If you don't have those it's quite difficult to get them.
When you finally obtain your SSN, renouncing is a challenge in itself. It requires filing tax returns for the past 3 years + 6 years of FBAR (you'll most likely need an accountant for this or face steep penalties), pay $2300 to renounce, and then file another tax return for the year in which you renounced.
Bunq, the first bank that's listed, has special requirements: https://together.bunq.com/d/2318-why-are-there-special-regul...
With an SSN you can open a basic checking and savings account. However, you'll be denied for any type of investments. This also means U.S. citizens can't participate in pension plans of Dutch employees.
Even local crypto exchanges are refusing service: https://bitonic.nl/en/faq/33/what-is-a-us-person
Meanwhile, banks and brokers in the U.S. require a permanent residential address. For example, Wealthfront states they don't "support clients residing outside of the U.S., including U.S. citizens residing abroad".
Additionally, The Netherlands has a wealth tax. Even on unrealized gains. Each year you pay taxes on stocks you haven't sold yet. Then, when you actually do sell, you can't use the previous years of Dutch taxes that you've paid to offset the U.S. capital gains tax.
It's especially complicated for so called Accidental Americans. Many of whom don't have or know their SSN. To get one you must submit your birth certificate and US passport. If you don't have those it's quite difficult to get them.
When you finally obtain your SSN, renouncing is a challenge in itself. It requires filing tax returns for the past 3 years + 6 years of FBAR (you'll most likely need an accountant for this or face steep penalties), pay $2300 to renounce, and then file another tax return for the year in which you renounced.
> Even local crypto exchanges are refusing service
As long as one has non-US local friends/family who can cash out, I don't think this matters much (albeit in a local currency)
I think in this day in age, all of this is really depends on ones personal preference in how deeply they want to tie themselves directly to the traditional banking system (and traditional asset classes/financing/jobs/organizations) without even trying to give up US citizenship (because obviously, the process is a PITA).
As long as one has non-US local friends/family who can cash out, I don't think this matters much (albeit in a local currency)
I think in this day in age, all of this is really depends on ones personal preference in how deeply they want to tie themselves directly to the traditional banking system (and traditional asset classes/financing/jobs/organizations) without even trying to give up US citizenship (because obviously, the process is a PITA).
She also wrote "Without an address in the US, I can’t open an investment account there; with US nationality, it is becoming more and more difficult to do any investment or borrowing outside of the US.".
Yeah, how to remain non rich: keep your money in a savings account and not invest in stocks, etc. Want to start a business? Need a loan for that? Sorry...
Also that webpage doesn't even say those banks accept American clients, "expats" don't mean American, EU freedom of movement and ease of getting work visa means there's people from all over the world in the EU, either temporarily or permanently.
Addendum: I've also talked to someone who said she couldn't take some jobs because if she has access to the company's bank account, she has to report that to the IRS, maybe even the amount in that account, which of course no foreign company would volunteer unless they really have to.
Yeah, how to remain non rich: keep your money in a savings account and not invest in stocks, etc. Want to start a business? Need a loan for that? Sorry...
Also that webpage doesn't even say those banks accept American clients, "expats" don't mean American, EU freedom of movement and ease of getting work visa means there's people from all over the world in the EU, either temporarily or permanently.
Addendum: I've also talked to someone who said she couldn't take some jobs because if she has access to the company's bank account, she has to report that to the IRS, maybe even the amount in that account, which of course no foreign company would volunteer unless they really have to.
If you have access to your spouse's account you may need to enter that into the FBAR form https://en.wikipedia.org/wiki/Bank_Secrecy_Act#FBAR
Regarding the difficulty of investing/borrowing outside the US: Non-US banks are required to report stuff to the US if they have US customers. So they might not want US customers because it's a hassle for them.
Regarding the difficulty of investing/borrowing outside the US: Non-US banks are required to report stuff to the US if they have US customers. So they might not want US customers because it's a hassle for them.
And that in turn is not in line with EU law - if not in letter then at least in spirit so banks are caught between two powers and in turn offload that burden onto the citizens. Realistically as an American abroad you can do it but there is a continuous cost and stress associated with remaining a US citizen.
I know several people that have gone down this path and a few who are doing it right now, the US seems outright vindictive against those that want to leave, a bit like an abusive spouse that can't imagine there is a life after them for you.
I know several people that have gone down this path and a few who are doing it right now, the US seems outright vindictive against those that want to leave, a bit like an abusive spouse that can't imagine there is a life after them for you.
As a US citizen who lived in the Netherlands until recently, at least one bank (ABN AMRO) is fine with US customers, and is also attractive to expats in other ways- for instance, they will do more of their correspondence in English than other banks. It required maybe 20 minutes in an office at my local branch when I opened my account for them to have dealt with everything, and then my banking experience was no different from anyone else's.
The problem in the Netherlands isn't so much expats who grew up in the US, but "accidental Americans" who were born in the US and left as small children. They are US citizens, but don't have an SSN, which Dutch banks require to comply with US law (and with pandemic-related embassy closures, obtaining one isn't necessarily easy).
The problem in the Netherlands isn't so much expats who grew up in the US, but "accidental Americans" who were born in the US and left as small children. They are US citizens, but don't have an SSN, which Dutch banks require to comply with US law (and with pandemic-related embassy closures, obtaining one isn't necessarily easy).
I don’t think ABN AMRO is completely fine with US customers today, given that they have an US persons disclaimer and have a phone number for questions regarding it (https://www.abnamro.nl/en/personal/specially-for/us-persons....)
Problem is that FATCA requires banks to actively send the US government personal information about its customers with US citizenship, while the GDPR forbids them from doing so without consent from their customers (https://americanexpatfinance.com/tax/item/632-eu-data-protec...)
But yes, accidental Americans definitely are a weird case. Some of them don’t even know they have US citizenship until the IRS sends them a message, or when, upon visiting the USA, border control requires them to show a US passport (https://en.wikipedia.org/wiki/Accidental_American#Awareness_...)
Problem is that FATCA requires banks to actively send the US government personal information about its customers with US citizenship, while the GDPR forbids them from doing so without consent from their customers (https://americanexpatfinance.com/tax/item/632-eu-data-protec...)
But yes, accidental Americans definitely are a weird case. Some of them don’t even know they have US citizenship until the IRS sends them a message, or when, upon visiting the USA, border control requires them to show a US passport (https://en.wikipedia.org/wiki/Accidental_American#Awareness_...)
All of this adds up to making Americans less attractive abroad than say Aussies or Brits, which surely has some negative impact on US competitiveness. And for what? Even the IRS estimates the savings in lost taxes to be a mere fraction of the costs of enforcement.
This makes literally zero sense. None. Cut your nose off to spite your face.