I am starting a new topic for something that grew out of @RikkeS discussion about finding a job/right to work. I am trying to post this as neutral as possible. I am personally of divided opinion on some of these items. I see why they are in place, but also see potential for abuse.
Jus sanguinis and jus soli are the two most prolific philosophies countries use for conferring citizenship. Most countries use a mix of them. To explain jus soli means if you are born in that country you are a citizen. Jus sanguinis is based on ancestry. There are some other ones such as Vatican City confers citizenship to the Pope and some officials. When they leave office they lose that citizenship. If they would become stateless because of this they automatically become Italian citizens.
Most countries either ignore dual citizenship, or recognize it. Obtaining a second citizenship voluntarily is grounds for losing your original citizenship, but may not apply in cases of jus sanguinis for some countries like Austria.
When a country recognizes jus sanguinis it will vary.
How a country recognizes dual citizenship after you certify it will vary. I have been told, but can not confirm from personal experience, that if your great grandparent certifies their Irish citizenship, then if either your parent or grandparent then certifies theirs, you are eligible.
The UK explicitly limits it for children born overseas. It is not conferred past the first generation unless certain residency requirements are met. I would have to either shown physical residency in the UK before my children's birth to extend it to them or have them establish residency with me before they became adults.
Once somebody has EU citizenship the rights to free movement to live and work come into play. If you were free to move to live, work or recreation, but could not bring your family, would that really be free? A non-EU family member accompanying or joining a EU citizen family member is supposed to be treated like a EU citizen. If a visa is required, the fee is supposed to be waived. The family members is supposed to have the same right to live/work as an EU citizen, and fees for any certification are supposed to be waived for things such as a residence card. reference - http://europa.eu/youreurope/citizens/travel/entry-exit/non-eu-family/index_en.htm
Essentially that appears to be the basis of the accompanying and reunification rights for EU citizens. There is one caveat. Some countries have insisted that their sovereignty over their own citizens within their own borders is their right, and can not be infringed by being part of the EU. What does that mean? To bring my spouse/children with me to the UK is much harder than bringing them with me to any other EU country.
These rights extend to grandparents and grandchildren. It might be tested in the EU courts if the "economically dependent" caveat that some countries have put on their processes is valid or not.
One thing to add. Obtaining additional citizenship is not all roses. There are some thorns. When you obtain citizenship that includes all rights and RESPONSIBILITIES for that citizenship. For example you might find yourself needing to meet a military service commitment. Taxation is a big one.
Taxation philosophies are either by place of work, place of residence, or citizenship. The US uses a mix of all three. Even living abroad and working abroad US citizens are responsible for taxes on their economic activity. This also includes the economic activity of your spouse, even if they are not US citizens.
The US used the excuse of tax cheats and big investors to push through a law a few years ago that affects almost every US citizen. They require any bank doing business in the US (even if just trading in stocks on one of the US exchanges) to report information on the accounts of US citizens, or face penalties. An US financial institution is supposed to withhold 30% of transactions if the institution they are doing business with does not comply with the reporting. I have heard some banks don't even want US citizens to have accounts with their bank to avoid the reporting requirements.
https://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA
Luckily, Italy does not require any military commitment or taxation (unless you are living in Italy). Unfortunately, as you have mentioned above regarding the US, I will have to pay taxes both in the US and in Ireland, or whichever country I live in outside of the US.
Most countries in the world tax you based on where you live/work. For most European countries you are only taxed if you live work there. A few tax you for a year or two after moving, or if you move to a country with little or no taxes.
The US taxes on both. Anybody living and working in the US has to pay US income taxes, and any citizen living working elsewhere has to pay taxes. Also if you give up permanent residence or citizenship to avoid taxes there are tax penalties.
I was thinking, and could be wrong, that you only paid taxes to the US when living abroad if the amount exceeded a certain limit? Here's a pretty good site with an example. I will definitely hire a good expat accountant, but it appears the amount is $99,200 USD before you owe US taxes. I could be reading this wrong, so please correct me if someone interprets it differently!
https://americansabroad.org/issues/taxation/us-taxes-abroad-dummies/
You are right, but you still have to file taxes and pay for any assets that you still have in the states.
Great topic, David. Thanks for starting it. I'm enjoying the education 🙂 It's kinda scary to think how far the US government can reach with their banking requirements.
@katemreagan be sure to look for the Foreign Income earned credit. I qualified for it this year by extending my US tax return date to October, even though I had worked half of 2014 in the US.
It's complicated though. Have a tax pro look at it for sure, unless you know the ins and outs yourself.
@jason1575 you're right that you only have to pay if your income exceeds a certain amount. However, you have to file regardless.
For what it's worth I used TaxesforExpats this year. You'll find that filing US taxes as an expat ain't cheap! Expect to pay $400-$500. There's a coupon code for that company on the Resources page if you're interested. My experience with them was very positive, so I signed up as a partner.
Great info Liam. Thanks!
I was thinking, and could be wrong, that you only paid taxes to the US when living abroad if the amount exceeded a certain limit? Here’s a pretty good site with an example. I will definitely hire a good expat accountant, but it appears the amount is $99,200 USD before you owe US taxes. I could be reading this wrong, so please correct me if someone interprets it differently!
It is complicated. I am not a tax preparer or a tax lawyer. My layman's understanding of a few:
You have to use the currency conversion rate the IRS publishes. Unless you have receipts for any currency conversions.
You can deduct living expenses in your current country as a standard deduction. The amount varies by country, and can even vary by where in the country. When I looked a few years ago the tables had an entry for most of Ireland, and then specific entries for Dublin and Shannon. I think for the 2013 tax year it was about 50,000 for a family of 5, London was about 90,000.
You can deduct income taxes paid in the country you are living/working.
Moving expenses can be deducted
Assets owned in the States have to be considered
You will always have to file federal taxes, and some states like California will try and lay claim to you needing to play state taxes based on ties (not just property) to the state. For example if you have adult kids under 25 paying in state tuition, and want to keep paying in state, you have to file California taxes as their parent.
David - pretty sure moving expenses are only deductible under certain circumstances e.g. you moved for a job. I don't think you can deduct them if you're just seeking a new life abroad.