I''m a Dutch citizen, I trade futures on the CME of Chicago, should I make some money, do I have to pay taxes to the American government? By the way, I live in the Netherlands, all my trading is done online. Who knows anything about this situation?
no, due to the fact that the us and the netherlands have a double taxation agreement you only pay taxes in holland... however, one issue you should definitely be aware of is that if you have an account in the us taxable capital gains will deinitely be forwarded to the dutch tax authorities of your official residence... cheers
To my knowledge, you do not have to pay taxes on profits you make trading American markets, just as I wouldn't expect to pay income tax to Japan for trading Japanese stocks as an American citizen. If someone has further knowledge of this or I am in error, feel free to correct me.
correct, zboy, however under double taxation agreements you still have to pay taxes in your home country... many europeans think that opening a brokerage account in the us means they can fudge their taxes at home, however, as stated in my prior post, the us tax authorities will inform your home countries tax authorities about your taxable income...and if you "forgot" to declare it back home... there have been quite a few nasty shocks there... cheers
Thanks for the reassuring answers guy. The Dutch system is not paying over capital gains but a fixed percentage over your assets (1.2% yearly). A follow up question. My fiancee is American, should we get married (with a prenoptual), does that change anything?
no, wouldn't change anything as long as you maintain dutch citizenship and legal residence in holland... as long as the above holds there is nothing you can do to avoid paying taxes on your worldwide trading income in holland (and the us are really diligent on forwarding that info to your home country!!)... however there are a couple of european countries where futures trading is tax free - don't ask me which, check with a major intl accounting firm for a small fee... if you are willing to move your legal residence there your worldwide income from trading futures (only futures, not equities etc) would be taxfree... cheers
well... us tax law requires all us citizens to file an annual tax return and you are taxed on your worldwide income, no matter where your official residence is... there are a number of complex exclusions and credits available to allow avoidance of double taxation, but for your specific situation etc you'd need to consult with a cpa or accounting firm that has intl expertise... cheers
ps incorporating is of course a different matter... but the situation for you personally as a us citizen doesn't change. cheers
Due to their taxation being based on nationality and not residence US citizens face significant disadvantages compared to citizens of most other countries. As a non-US trader you should try to have your official primary residence in a country that does not have any capital gains taxes (e.g. Switzerland). Then you only have to try to minimize your income from dividend and interest payments.