Dual Citizenship in European Country but living in America? (25)
So been thinking about some things 
and was just wondering if you guys have any input on this:
I have 2 citizenships, so lets say I open up a bank in Europe and do all my business from that European citizenship and give affiliate networks my bank information from the one in Europe. But I live in America, and there are European banks in America which I can go to and just use my European passport to withdraw my money etc.
Does that mean I don't have to pay taxes on that income? I think its a bit shady obviously but I would be pretty much tax exempt since nothing is tied to my actual SSN or US info...
Thanks for the input guys!
I'm not American so I'm not 100% sure about this, but I'm pretty sure that the US taxes your money no matter where you live. Obviously you would have to pay the money in the foreign country where your bank accounts are, but I'm almost certain the IRS would also tax you.
Whether or not they catch you is a whole different story, but in short no, you can't just use dual citizenship to not pay tax.
I mean obviously the US wants to tax me, but If I open up a bank account in Europe using just my European passport and information, none of it will be tied to my American info. I could just be another person with the same name, since surely there are other people with the same name like me in living in Europe.
Also US taxes are wayyyy more than the European country that I have dual citizenship in which would be very beneficial especially when running a lot of traffic. It would almost be like having another identity since there really isnt a way that the US gov can go the the European country and say give me all bank information from this individual First Name, Last Name since there are more than one living in that country.... Also who's to say I even have a bank account in that country in the first place? 
If your European bank has branches in America that you can withdraw money from, they might be able to. Canadian banks, for example, have made an agreement with the United States that they will hand over the financial information of their American customers so the IRS can tax them, because the Americans said that if they don't do it, the Canadian banks won't be allowed to operate in the USA. They might have made the same arrangement with your country.
On top of that, what happens when you buy a house for $500k and have a reported income to the IRS of say, 20k? They're going to look into, they're going to see you can't afford it, and they're going to go over every with a fine tooth comb to find where you're hiding the money.
I'm in the same situation as you, I also have dual citizenship with a foreign country, but it's just not even CLOSE to worth the pain if you get caught.
Hah, you can't outsmart the IRS. If you're a citizen of the US, expect to pay taxes. Otherwise, submit the forms to become an ex-pat.
It's possible that they don't find out of course, they don't have constant access to your bank accounts BUT if you ever have a control you're absolutely screwd, because they do their investigations and without even asking you they already have ALL your bank accounts, basically when they come after you, they do their homework , talking from experience here with accounts over 4 different countries (it wasn't in the us but in a european country) .
Also, to be clear, it's fraud no matter how you put it, and when you're talking big numbers it's a dangerous game ! there's optimizations you can do, with offshore structures (with lawyers and around 50 - 100K$ to setup, not the buy now thingy in seychelles) but ultimately, you have to pay taxes in the country where you live more than 180days a year, PERIOD... then all you have to do is to live in a country with low %tax on personal yearly profits.
Fiscal optimization is a serious matter, that only makes sense when what it's gonna cost you to setup will save you 100K$+/month , otherwise trust me it is too much energy and limitations!!
Mehdi
PS : i know, you were just asking for US and i went too broad but this can actually benefit someone else.
Does anyone know how that works out with states that have no income tax?
Side note... if you are a US citizen and live in a foreign country for an entire year, you get an 85k tax deduction on your income... but I think that means you can't come back here for an entire year, or maybe only like one or two short visits.
Originally Posted by mehdi
Do you really wanna have to deal with the burden of maintaining multiple accounts. The burden of W8s. The feeling of beeing watched by the IRS each time you take out money from the bank or spend it?
Its not worth it.
If your income is significant (ie 250k+ a month) go and talk to some professionals and get a proper structure setup.
If your income is lower - dont fret about it. Pay your taxes! Focus your time and effort on making more money
Yeah I think US does tax you regardless.
Originally Posted by harrypotter
Mehdi
doing what your talking about is 100% tax evasion ....you wont just get a penalty.....you will have to defend yourself in court......USA takes this stuff very seriously and due to the way banks work these days you will be found out.....and when you do it will not be a good thing.....many richer powerful men have tried and fail...
with the new laws...
if you have bank accounts in foreign countries you are required by LAW to state the balances in those accounts....IF you don't do this the IRS looks at it as tax evasion, its very cut and dry....
and not something I would fuck with personally....
I know people do and think they have "beat" the system somehow but the IRS is like a pitbull when it comes to offshore stuff they dont give up or go away.....
Taxes in the USA aren't that bad esp compared with many EU countries....
also remember you put yourself at a huge currency risk too depending on the country your in.....if its euro based country you take a chance of loosing a chunk of change converting it back to dollars with the way the euros going...
for instance you would have lost over 10% in just the last few months....and 30%~ within the last year....if your money was in euros .....and you had to re-patriate back to dollars....
best advice I can give is to hire a good accountant and seek legal advice....its worth every penny you pay for it
search on google for five flags theory, five flags offshore..., i'm sure you'll find the subject very interesting.
Does anybody have recommendations for oversea's banking?
good info..
http://www.sovereignman.com/
I am a Us citizen and have been living in Spain for the past three years.**and I haven't been living off affiliate money.**** but from my experience Banking systems in Europe are totally different. There is hardly any communication between US and European banks. But if you are making a ton of money as Tjin had suggested you should get professional help but otherwise you are good. Just make sure the networks aren´t paying you with US --SS number otherwise you need to pay the US.
Either way you are going to have to pay someone taxes though. I actually pay higher taxes here in Spain than I would in the US but since I'm not making a ton of money so I just get taxed here for simplicity.
I hope that helps. Cheers!
I'm actually working towards dual citizenship at the moment for some "unique" reasons .
Ryan - what's the advantages of having dual citizenship?
the five flag approach is interesting - for anyone that was wondering like me what it is:
One country for your citizenship and passport, preferably a country that does not tax its citizens that reside abroad.
A second country for legal (tax) residency. Ideally a low- or zero tax haven.
Thirdly you would need a safe haven for your assets. Separating your assets from the country of residency is smart practice under any circumstance.
Your fourth flag would be a country for doing business, one with low or no corporate tax nor withholding taxes.
And lastly, you will be able to choose your favourite countries to spend time in. This could entail spending time as a tourist in your former home country.
US taxes you no matter where you are, but you do get a tax comp for the particular country you live in outside the US. The netherlands gives you about $90k, which means you are the NL's problem for the first $90k, then you drop into the US tax code after that. Of course there are ways around it, and dropping your income so you never go above the $90k.
Being an American, at least for business, there really is no reason to bring it there tax wise if you're not American. On other hand, Americans pay such low taxes on average compared to the rest of the world, there's no reason to move their business out of the country. Of course you can use tax shelters, but that's all it is, a shelter, not a black hole that no one can find.
I'm going to go dual citizenship in the future. SovereignMan.com site that someone mentioned has a lot of good info. It just makes sense to not have all your eggs in one "country basket"
Thank you for that link caleb.
I'm also in the process of getting second (and third) citizenship, if anyone's interested here are the best options :
- Lithuania : create a small business (no minimum turnover requirement), you get a 1year residency permit (allows you to go everywhere in schenguen), after the 5th year you have lithuanian citizenship! Tax is low and it has very good visa free countries list :
http://en.wikipedia.org/wiki/Visa_re...anian_citizens
- Paraguay : open a bank account with 5k$ on it, you get a residence permit for 10year almost instantly, and after 3 years you get the citizenship, tax is literally 0 for business outside the country with very good visa-free countries list too :
http://en.wikipedia.org/wiki/Visa_re...uayan_citizens
Cheers,
Mehdi
Originally Posted by dubbsy
also, as far as protection, in most matters, as long as you are still a citizen of the US, the dual citizenship will not help you out in any way, shape or form. Only if you renounce, and pay that penalty (exit tax) are you off the hook with the US.
+1 , the US is one of the only countries where you have to completely give up your US citizenship and passport to stop paying taxes to the us, and as sean said there's an exit tax.
Mehdi
Home > General > Affiliate Marketing Forum