How are you avoiding French taxes? You may want to double check that as you are personally responsible. One thing I learned is to not trust my company to do the right thing when it came to foreign taxes.

As I recall (I'm not a CPA), U.S. law allows expats to only pay taxes on the first $80K. After that, you don't have to worry. Also, you get foreign tax credits which can be used in the future.

Having a tax consultant/accountant is part of my package. PWC may not be perfect, but they seem to at least mean well. I've read the relevant documents and it's pretty clear that you must pay taxes in both U.S. and the place of your residence. Any U.S. resident who is getting out of paying any taxes whatsoever is looking for trouble.

You're basically required to pay U.S. SS and Med even if you're a non-resident citizen. Some states may also require you to file a return even if you are a non-resident citizen. You generally earn a credit for the taxes you pay abroad against any U.S. taxes you would owe, subject to certain exceptions. A minimum income tax is normally imposed by the U.S., no matter how much you've paid in taxes abroad. Finally, the first $80,000 is exempt from U.S. taxes when you have qualified as a non-resident citizen, but any amount after that may be taxed, subject to terms of the double taxation treaty with your country of residence.

It's more of a headache than anything else. The U.S. is one of the few, if not the only country in the world to require you to pay taxes regardless of where you live.

stimpy writes: In my experience, the dollar amount is correct, but as jja34-1 says, you only pay U.S. taxes on any amount after the first 80 grand.

American living in Madrid, Spain. Transferee from NYC office but considered local hire. No perks for me.

But love it so far (6 mos. in) and would do it again in a second

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I Love New York -- Viva España

That is correct. For non-residents, it is now the first $80,000 which is tax free (it was $72,000 and then increased by $2,000 a year for several years) After that it is pretty much a flat 15%. The problem comes in the first year or two of living abroad when you may not have met the requirements and then COULD BE subject to double taxation. That being said, in the cases above (UK and France) there are taxation treaties between the countries and you should never be paying double tax for more than a six month period. Even having done that tax credit can be obtained from the US for any double taxation involved.


Other countries which tax their non-resident citizens---Phillipines and Libya!!

I'm not an expat, but I'm hopeful that I'll get an opportunity to be one in the next couple of years.

Yep Premex, I had it backwards. But Hfly, neither I, nor PWC, nor my French tax attorney said or knew anything about a tax treaty between France and the U.S.

I paid full French taxes for the two years I was there. My company covered it through some accounting tricks in my pay, but I still had to file a return in France.

But yes, I did get foreign tax credit which I think I can still use in the future. However PWC and my personal account disagree on that point and I haven't had the heart to investigate more. I'm just so glad I finally finished my 1999 taxes. Ugh.

PWC is NOTORIOUSLY bad in these situations. I know of many case where they have screwed people up royally, and know of a case where they were fired from a very large European company due to the screw-ups they made in expat taxes.

There IS a tax treaty between the US and France and it has existed for many years. This should have saved you from double taxation.

Hell, I once had a meeting with PWC where their "expert" declaed that I needed to submit a tax return from a country that has NO personal Tax Returns!!

Information on US-France income tax treaty (as of 30 December 1995):

http://www.amb-usa.fr/irs/taxtreaty.htm

http://www.info-france-usa.org/intheus/tax/004us.asp

I am thinking the US France tax treaty information discussion was started by my comment? Sorry, I will clarify. We filed and paid US taxes, and my spouse works for an international scientific organization which is (somehow) exempt from French taxation. This doesnt mean we don't file the french tax paperwork though. I can't speak for other expats living here, but I know the taxation issue was a pretty big consideration when planning our move here, we just lucked out I guess. Sorry for the confusion and thanks for the advice and information!

I've always had expat contracts with net amounts: the company pays the tax and I know what I eventually will have "in my pocket" for spending in the host country. For an average expat it is almost impossible to understand what his nett pay will be if you are only discussing/negotiating gross amounts.

Cost of living index is another one of those expat typical confusing factors. (a friend of mine was given a 50% raise but then sent to a host country with a twice as high cost of living index as his home country http://www.flyertalk.com/forum/frown.gif)

I've been an expat here in Paris for about a year and a half, and in no hurry to leave!

It's true that amidst all the advantages, figuring out your tax liability is one of the most complicated downsides. This year I'm being paid in Switzerland, resident in France, and as a US citizen will have to file there as well - I'm not looking forward to the mess of paperwork.

And in the academic world, there is no salary benefit to working overseas - no hardship packages or cost-of-living adjustments, unless you happen to be French and posted in one of their multitude of overseas departments or territories. Usually in sunny tropical locations...

I'm a Swiss expat in Japan. Based in Tokyo but living in Yokohama. My family and I have been here 2 years and quite like it. Taxation is not that much of a problem from a paperwork POV as I pay them locally. I just wish they had the same taxation rate as in Switzerland.....

Wow. That was quick. Apparently I'm facing a potential move to Tokyo in the very near future. I'll probably be sending an email to some of you Tokyo based folks asking some questions - hope you won't mind.