On 14 February 2023, the Council of the European Union announced the adoption of conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes. This includes the addition of the British Virgin Islands, Costa Rica, the Marshall Islands, and Russia to the EU list of non-cooperative jurisdictions (Annex I), bringing the total number listed to 16 jurisdictions. The Marshall Islands has been added and removed previously, while this is the first time the other three jurisdictions have been listed as non-cooperative.
The revised EU list of non-cooperative jurisdictions will become official upon publication in the Official Journal of the European Union.
Taxation: British Virgin Islands, Costa Rica, Marshall Islands and Russia added to EU list of non-cooperative jurisdictions for tax purposes
The EU continues to promote fair tax competition and address harmful tax practices. The Council today decided to add British Virgin Islands, Costa Rica, Marshall Islands and Russia to the EU list of non-cooperative jurisdictions for tax purposes. With these additions, the EU list now consists of 16 jurisdictions: Read More
While being an American citizen comes with many privileges, it also comes with a host of tax obligations. This is where things get tricky for accidental Americans – people unaware of their U.S. citizenship. In recent years, the issue of accidental Americans has garnered attention due to the increasing global mobility and their potential to face significant financial consequences in the United States.
In this article, we will explore the challenges they are facing and discuss strategies for avoiding the tax implications of accidental citizenship.
Who Is an Accidental American?
An accidental American is a term used to describe someone who holds dual citizenship in the United States and another country, but is unaware of their U.S. citizenship status. They may have acquired U.S. citizenship even if they have never lived in the States or have only spent a limited amount of time in the country. For many accidental Americans, the discovery of their citizenship comes as an unpleasant surprise – often through a realization of the tax filing obligations to the United States.
As tax time approaches for many, taxpayers and tax professionals alike are engaging in the annual ritual of gathering their cryptocurrency transactions and seeking out the latest and greatest guidance from the IRS on the subject. As luck would have it, the IRS recently released an internal memorandum fleshing out its stance on the taxation of virtual currency received in exchange for providing services. The memorandum describes the taxation of virtual currency received in the “crowdsourcing labor market”—for example, for performing microtasks or other projects—but its principles are applicable much more broadly.
The IRS memorandum was quietly made public on August 28. It is a reminder that the IRS continues to receive requests for additional cryptocurrency tax guidance. In the memorandum, the IRS lays out its view that convertible virtual currency is “property” for federal tax purposes, and that its receipt in exchange for performing services gives rise to gross income. But let’s look a little deeper at the IRS’s reasoning. For starters, the IRS memorandum poses the following question:
NOTE: TaxConnections often receives questions from taxpayers living around the world. This question came in recently and we ask our members how they would answer their three questions.
TaxConnections Members – Please go to the Ask Tax Questions Section and Answer the question there. If you are currently a member just Login to your Tax Professional Member Account. Once you answer their questions, it will be sent directly to them by email. You will be connected as they are searching for a Tax Advisor to to help them as well. TaxConnections also promotes you our our Home Page every time you answer a tax question from one of our site visitors.
My spouse and I are Canadian citizens and are currently visiting China. Although we are not residents of China, we are planning to stay here for a minimum of 3 to 4 years before returning to Canada. During these years living outside Canada, we are planning to file our income tax as a non-resident. We don’t have any significant residential ties to Canada (i.e. we don’t own a home or vehicle in Canada, nor do we have any dependents living in Canada.) For secondary residential ties, the only tie that we currently have is a bank account with RBC, TD and money is sitting in Meridian Credit Union high interest saving accounts. We are still using our Canadian Credit Cards while visiting China.
Twenty Eighteen was a tumultuous year my friends and unfortunately my blog posting went on hiatus. I have a perfectly good excuse I must say, it was my big FIVE-OH birthday last year!! Yes, yes, I did hit that number in spite of my various attempts to stop Father Time! Besides starting a copious collection of AARP invitations promising me travel bags and blue-tooth speakers if I joined their ranks, I traveled a lot in 2018. One trip over early Fall was to Bilbao, Spain. We took the train from Madrid to Bilbao, the first thing to greet us at the Train Station was the stained glass facade (in the picture above), I was in Basque heaven after that, I was hard pressed to leave but work beckoned back home after a lovely week of the famous Bilbao hospitality. That got me thinking…how wonderful it would be to retire abroad! Wouldn’t it?
If you did decide to retire abroad, you should keep the following points in mind:
The question is: “I’ve heard a lot of words to describe people who were no longer U.S. citizens – “surrendered”, “relinquished”, “renounced” U.S. citizenship. What is the difference between these three terms?” Read More
It has been a busy time for tax-related news and upcoming changes. We have compiled many of the tax changes, deductions and tax rates for easy reference year round. It is more important than ever to plan ahead and review your options to maximize your financial results. Also please visit our side-by-side comparison of 2017 tax law and and the recently enacted “Tax Cuts and Jobs Act.”
HIGHLIGHTS OF THE CHANGES AFFECTING 2018
Congress in December of 2017 passed the Tax Cuts and Jobs Act that made sweeping changes to the tax laws. The issues impacting individuals and small businesses are included throughout this pocket tax guide. The following are changes not covered elsewhere in the guide. Read More
There are several techniques to insure that accumulated wealth and income earned prior to becoming a United States taxpayer can be protected from United States taxes. This requires planning in advance by nonresident alien individuals who will become United States taxpayers.
Since the enactment of FATCA, US persons (citizens and green card holders) overseas have, via lobbying efforts, requested relief from the additional tax compliance burdens placed upon them that appear to be increasing their costs of living overseas (which is generally more expensive than living in the USA anyway).
Their arguments fall into the following three: (1) generally, they file foreign tax returns and pay local tax preparation services but must also pay an additional $2,000- $3,000 for a US tax preparation service specialized in foreign residence; (2) generally the foreign income exclusion and foreign tax credit wash out the U.S. tax burden but for anomalies in definitions between retirement plans that cause undue burden on foreign residents US persons; and (3) US persons must pay more for financial services because they have become the pariah of the financial world.
It has been estimated that there are several thousand Americans living in Sweden.
Living in Sweden is an incredible experience for a number of reasons, including the friendly locals, the free, high-quality public services, the charming culture, not to mention easy access to the rest of Europe. As an American expatriate living in Sweden though, what exactly do you need to know regarding filing U.S. expat (and Swedish) taxes?
Navigating the complexities of U.S. tax compliance and international taxation can be challenging, especially for U.S. expatriates. One form that often goes unnoticed but carries significant penalties […]