The real question here is when will Ireland bring in something similar.....

Tax the Irish expats, and that deficit goes away! Tax people not to be Irish too... Someone in the Revenue/DOF or other who is worried about the value of their civil service pension ten years down the line would find an idea of multiplying the tax base, many times over, very appealing and reassuring.

I have often thought that the Irish Government might try and do this someday as a way of reducing the deficit. Presumably most of the Irish expats would just renounce their citizenship and become a citizen of whatever country they are living in (assuming this was an option of course).

I cannot see too many Irish expats being all that keen to pony up tax to pay unsecured bondholders in Anglo and to keep 300,000 civil servants in the comfort they have become accustomed to! As an Irish expat myself out of Ireland 8 years, I know what I would be doing!

US citizens get to vote, wherever they are. The Irish don't.

That's because US chickens get to pay egg tax...

I think you might be overestimating the income of Irish expats if you think taxing them will cure our defecit. Appropriating their entire wealth might solve the defecit for a year or two if it could be done practically but then what do we do after that?

But apart from that, Irish double tax treaties are all based on the concept of residency based on days spent in Ireland and irish expats who are avoiding tax are generally protected under one of these treaties. The US includes US citizenship in the definition of US tax resident in its treaties.

That only applies to earned income. For unearned income like interest or dividends there is no exemption but there is a foreign tax credit. It makes for a lot more paper to file.

This system actually has big benefits to people who live in Manhattan and California when they move abroad, even if they move to a higher tax jurisdiction!

As the system is reciprocal, they also get tax credits for the taxes they pay above the US federal rate (35%) when abroad

As far as I know this law is one of the main reasons there are US Expats all over London, as they basically get to live in London and pay effectively 35% tax (50% to UK and a 15% TaxCredit against future income when they move back to US) Versus 50% Total approx if living in Manhattan or California after state and city taxes are thrown in.

So basically they pay 35% no matter where they are. They have to stump up the difference if living in Singapore say (20%, so pay 15% to the IRS) OR the IRS gives them a credit if they live in London

35% top rate to live in a city like London is very very appealing, espec if you get an ex-pat package thrown in where you can avoid BIK for 3-5 years or so

I think you are fundamentally misunderstanding how foreign tax credits work. They won't "basically pay 35% no matter where they are" The IRS don't give you the excess foreign tax paid back and you can't carry credits forward against future income earned in the US if and when you return..

That special someone in the Revenue/DOF might be willing to give them votes. Not sure if our politicians would be as happy to do the same.

I'm not sure how good government estimates have ever been! I could catch the likes of Denis O'Brien out, and force him to pay more tax too. That would be very appealing to some.

From the little I understand of it - and we'd need an accountant to confirm and explain the details - I think the Canadian system offers a better model for Ireland than America does, if it was even legally possible to make such changes. Tax liability here is not tied to citizenship but is assessed by strength of ties to the country as well as time spent, and a long list is examined. A Canadian HNWI who claimed to have left the country for tax purposes could expect to face many questions if, for example, he or his spouse still spent extensive time in the country, his kids went to school here or he continued to own or control a home for personal use. Some of Canada's richest citizens do live abroad but they are in the minority.

Alas, very very wrong.
I'm an expat and am only too familiar with all this.

If you live in a country for more than 180 days in 1 year or 250 days in two years (either condition is met) you are considered a tax resident of that country and pay taxes there.

So a yank comes to Ireland to work, they pay Irish tax returns, file us tax returns, calc there income via their w2, and calculate how much tax they owe the USA. Then they list Irish tax paid and get credited this off their us tax bill. Usually it washes its face and the tax owed/refunded is quite small, a couple of k for someone earning over 100k. The us tax allows for a large number of deductions, all these help reduce bill.


The above days are aprox - give of take 5-10 days either side of 180 and 250.

The us tax system is obtuse, bizarre and very complicated IMO. For example, pro nba players technically have to pay tax in every state they earned money in (played a game) and they get a refund and return from their home states. Usually, this isn't strictly monitored but is the law.

For example, famous case of a v.wealthy hedge fun guy living on long island with an office in the city. City claimed he worked from the city and not his home. They wanted 3 years of tax returns aprox 25mm. He had to prove via diaries, credit cards etc that he wasn't working in the city.

Another thing, the IRS do not mess around. Wesley snipe a recent example.

Never seen this show but as you describe it but sounds like propoganda to me.

errrm...hypothetically let's say there was someone with dual citizenship working abroad under her non-US passport, how's the IRS to know there is any income at all?

First they can monitor your spending, second they can monitor your bank account and last but not least they can just ask local Revenue. Most countries work close to catch tax evaders.