yeah, being american blows if you're into dual citizenship. i had friends in college in the US who had dutch or german citizenship (because their parents were born in those countries, but they themselves were born in the US and were bona fide american citizens). they could work anywhere in the EU without any problems, and they often spent their summers doing this. often, and i think it's true with canada also, you are a citizen of the euro countries forever, even if you become a US citizen later in life. of course, they weren't daytraders, so i don't know if the above analogy helps. but if you wanted to trade an account in a foreign country's stock exchange (in a country like holland if you had dual citizenship there and with the US), you would only have to answer to holland's tax laws. however, you'd have to keep any significant profits (other than what you can move in cash) overseas, otherwise the IRS would see it. anyone know what the tax liability is for trading say, the amsterdam exchange if you were a US citizen??
Dual citizenship is now partially recognized by the US, but it can limit how much support they will give you if you are overseas and run into problems. See both: http://travel.state.gov/dualnationality.html http://www.richw.org/dualcit/ Dual citizenship is not, however, written in to US law, nor is it part of US tax code. The main problem with dual citizenship and trading overseas is that the US has the concept of universal taxation. Every penny you earn, regardless of where you earn it, is subject to US taxation. But if you do pay foreign taxes, you are given a credit for them, and to the extent that the foreign taxes exceed the US tax, you will not be taxed on that foreign income. Ie, you're a US/Canadian citizen living/working in Canada. Because Canada has a generally higher tax rate, you will pay lets say 29% tax on your income to Canada. The US rate is say 21%...so you will have to file a US tax return but you will be credited for your Canadian taxes...which exceed US taxes thus you don't pay to the US. Ok, single taxation at the Canadian rate. But let's say you're a US/Netherlands citizen residing in the netherlands. If the Netherlands has a 0% tax rate on your trading income, you're incurring no foreign tax. Thus, you get no foreign tax credit, and when you file your US taxes, you do so just like you're in the states. It's taxed at the normal US rate. But hey, it's still single taxation, just at the US rate even though you're living in the Netherlands. Sooooo, the Netherlands aren't a tax shelter for dual US citizens Of course, this is only enforceable in countries where the US has a tax treaty, and thus can get information on your activities. But the point is, if you're a US citizen, you should ALWAYS be paying taxes to someone...at bare minimum, the US. And also, you should also be filing a US tax return every year. This is definately territory where you should find an accountant who specializes in both Italian and US tax law. Beyond simple income tax, there are much more complex issues when it comes to estate taxes and wills. I wish every country was as cool as Canada...they are nice enough to only tax their citizens if they are resident in Canada.
thanks for the information in your post. it was very helpful. so if you are canadian and you decide to trade the DAX from canada, you are liable for what?? what if you are canadian but live in the US and trade the DAX electronically?? -b
PS - how do you find out which country the US has tax treaties with?? is there any way to open an account in a foreign country (if you're a US citizen) that doesn't have a tax treaty with the US and pay LESS??
It's not a solution because the problem does not exist. One does not have to surrender other citizenship(s) to acquire US citizenship. It's a commonly believed myth. It used to be somewhat of a gray area, but for many years it's not been anymore. To address another inaccuracy in another post in this thread, having two or more citizenships won't get you any different treatments by US diplomatic personal abroad. They could not care less. There is only one class of US citizens, and that's the one with an American passport. Wherever you live and wherever you earn your income, it's taxable by the US and you must file a US tax return; unless there is a tax treaty that allows you to elect to file in one country of residence rather than the US: you can do it in Canada for instance; if you're a Canadian citizen living in the US, you could elect to file for taxes in Canada. Of course, you would have to be raving mad to do that, but you could
If you're *resident* in Canada, you'll pay tax in Canada. Even if you're trading the DAX in germany. :/ The tax treaties are in <a href="http://www.irs.gov/pub/irs-pdf/p519.pdf">this</a> document, page 46. Yes, you could open a foreign account in a non-tax treaty country, trade from it, make money in it, and not pay taxes. But the trouble comes when you're filing your US taxes with an annual income of $10k, yet you're driving a porsche. Check out http://www.escapeartist.com/passports/passports.htm for some info on tax havens and whatnot.
Here's a list of countries you probably didn't know existed, http://www.escapeartist.com/OREQ4/For_A_New_Nation.html. There's some seriously wacky stuff out there. There's one country which has the aim of recreating the Roman Empire. Another one was a tiny rock off the coast of England that a WWII fighter pilot landed on and declared it his country, now his son is "King." Mostly they're just tiny little tax havens. I don't see why, with the right amount of money, one cannot become a citizen of these countries and get some serious tax breaks, better than that of more known countries.
I just looked it up and I stand corrected. Although it's not all that clear in my case... Here's the link: http://www.richw.org/dualcit/?from=http://www.faqs.org/faqs/cultures/irish-faq/part08/section-7.html
You were born in this country; Enjoy all the perks; Probably only trade the U.S. Markets; either pay your taxes like the rest of us or get the hell out of the country. I wish all of you other posters would stop trying to help this guy. Cut him loose. Let him go to Italy. One of my high school buddies did just that. Married an Italian woman and made a life for himself in Italy, as a graphics designer. Corso, either you're here or you're not.