But if one is a citizen of a country that wants to tax you no matter where (e.g. US), you still have to pay taxes? Anyone has successfully and legitimately moved elsewhere and reduced taxes?
Most countries have taxation rules based on the "residence" of an individual rather than the "nationality" of an individual. Therefore, if you stay in foreign country for a specified period of time, you will be considered a resident of that state and taxed accordingly. Further, the Double Tax Avoidance Agreements generally provide for taxation on the basis of the residence too.
In the case of US, from the IRS website I understand that foreign income of a US citizen will not be taxed if:
- The US citizen is a genuine resident of a foreign country for an uninterrupted period of a tax year,
- The US citizen is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
You can use the
IRS’s Interactive Tax Assistant tool to help determine whether income earned in a foreign country is eligible to be excluded from income reported on your US federal income tax return.
Trust this is helpful.