Do they pay taxes to both the countries they have citizenship of or the country they reside in.
In: 12
Taxes are paid where you work and where you live and usually have nothing to do with your nationality.
It really depends on the countrys involved.
A lot of the time it depends on your financial position within the taxable country’s.
But it depends on a lot of factors, IE. Gross income, assets, property, shares, spouse income, time spent in the country etc.
Most of the time dual Citizens with only pay tax in the country where they live, providing they only have assets in that country.
if they have asset’s in both country’s, then they will need to pay tax in both countries
For a lot of countries citizenship doesn’t equate to having to pay tax.
US requires overseas residents to pay income tax up to a point, Canada does not. If you’re a citizen of both and say you reside in Singapore; you pay Singaporean income tax and some US tax, but not Canadian tax.
There are also residency rules (usually judge by where you spend 183 days a year). That is your primary tax residence.
Source: this is my exact situation
The USA is the only major industrialised country on the planet that has a rule which says “if you are an American citizen you need to pay American taxes”. Every other major country have rules which are more like “if you live and/or work in our country, you pay our taxes. If you don’t live here, you don’t”. So unless one of your dual citizenships happens to be American, there’s no conflict – you simply pay your taxes like any other resident of the country you live or work in.
USA breaks the norm with this one. Most other nations have you pay taxes based on where you live, some require you to live x ammout of the year in the nation, but If you are an American, you pay american taxes no matter where you live often on top of the nations taxes.
There’s a lot of bad information here. In the past tax collection in various countries were known as “inland revenue” or “internal revenue” referring to tax collection stopping at your countries borders and indeed the IRS is still somewhat erroneously so named. Taxation is more complex as people in the past and currently have exploited loopholes in international taxation and governments have broadened tax laws to shut these loopholes down and collect more taxes.
The situation today is that you do have to **check the rules of both countries** that you have citizenship in as well as the country that you are doing work in (you could be a dual citizen working in a 3rd country). Leaving aside oil rigs and cruise ships you are often are required to file taxes in both countries. There are exemptions, allowances or different rates of taxation compared to normal salaried people that may apply to you and whether there is a gross tax liability. It is a regular situation that you can be assessed for taxes in both countries on the same money (and at different tax rates). Furthermore different laws and rules apply as to whether you are **Tax Resident** – your status of which can be different from your citizenship.
However there is tax relief and for this you need to look at the **Double Taxation Agreement** between the 2 countries. These agreements are country specific and no-one should give you general tax advice without checking the specific agreement.
These are the UK USA current DTAs [https://www.gov.uk/government/publications/usa-tax-treaties](https://www.gov.uk/government/publications/usa-tax-treaties)
What you can often find in a DTA is rules regarding **Tax Credits**. This means that PAYE and other taxes paid to one country may be recognized in another country. So you can work in country A, have to declare that income in both country A and country B, but you also get to recognize the tax already paid in country A both jurisdictions.
Also a note every country has it’s own tax year so don’t assume that it’s by calendar year:
UK = 6 April to 5 April
USA = 1 Jan to 31 Dec
South Africa = 1 March to 28 February
Australia = 1 July to 30 June
In the EU you can only be taxed on your income once, so I only get taxed in the nation I work. There is an additional smaller tax that i still have to pay where I live but it is not on my earnings from where I work.
Work in the Netherlands live in Belgium.
You pay taxes to the country where you live. This is irrespective of citizenship.
Source: My wife and her family are dual Canadian/American. My MIL is American and pays Canadian taxes only.
You don’t? Why would you report earnings you made in another country to the IRS?
Edit: OK some don’t agree, but why? I’m curious if I’ve missed something. In my opinion, yes taxes are necessary but unless you’re employed in both countries, why does one have a right to take your income from the other?
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