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by tromp 782 days ago
As a Dutch citizen, I can leave the Netherlands to live elsewhere and no longer have to file Dutch taxes.

US citizens have an IRS filing requirement even when living abroad.

What other countries behave like the US in this regard?

6 comments

Even Germany which is an EU member has an exit tax when moving to another EU country. This is theoretically against the EU's principle of free movement of capital. According to EU law, any restrictions on the movement of capital or payments—either within the EU or between EU and non-EU countries—are generally prohibited. However, somehow Germany gets away with it.
It's not only Germany but also Austria and France (until 2004?). The Germany Wegzugsbesteuerung is meant to prevent cases where Germans leave the country for more than seven (or twelve upon request) years, e.g. to Switzerland, sell their Germany company stock and profit from paying a much lower tax or none like in Switzerland. Steuerflucht, tax evasion is prevented with this and there are certainly many who'd other move abroad, sell without taxation and move back again. There a plenty of exceptions though with countries Germany has a Doppelbesteuerungsabkommen (double taxation treaty) with to prevent cases where the individual would have to pay taxes in both countries.

Personally I never heard of this tax before, despite being a German living in Austria, but then: The tax targets wealthy individuals with company holdings trying to evade taxation. https://de.wikipedia.org/wiki/Wegzugsbesteuerung

It is a bit different though, because the German exit tax applies to companies and people holding more than a 1% share in a company. So no exit tax if you hold bitcoins as part of your private assets...

Agreed that there is some tension with EU principles, but it is difficult to get it right. Building a company in country A for 20 years, then moving to country B for 184 days to sell it completely without paying taxes also does not seem like a fair system.

This applied to a friend of mine who held copyright on music. Apparently this is non transferable in Germany and it was worth quite a lot. He had to pay a significant amount to move to another EU country.
Eritrea, an African dictatorship. But they charge a measly 2% and people don’t bother paying if they have no plans of visiting Eritrea again.
Sweden has an exit tax rule where they will continue to tax any capital gains worldwide for 10 years after non-residency.
If you have a permanent residence permit in Japan you need to file their taxes annually even when living abroad.

In Finland you have to live abroad for 3-4 years until you are not taxed anymore.

The permanent resident permit concerns immigration, not the tax office.

The tax office cares if you have a domicile ("living base") in Japan or possess a residence there for over a year.

Not a tax professional.

If you're born in the Netherlands and retire to South Korea, will the Netherlands continue to pay you a base income and provide healthcare?
Does US do that?
How about healthcare? I was under the impression that it isn't provided even if you live in US.

Pensions for elderly works within borders of EU.

You can for example move from Netherlands to Poland for retirement and get Dutch pension while living very comfortably in Poland.

Social services in the US include Social Security, Medicare and Medicaid. (Note the capital letters. Those are the names of the agencies.) And yes, they all cover citizens living in and outside the United States.

The US government makes employers (corporations) pay a large amount of money into the private health insurance system (Required by law per employee. That sounds socialized, doesn't it?). They do that to reduce the tax burden on the poor, and to maintain healthy competition in the insurance market, for better or for worse.

In my opinion, that means doctors make more money because insurance companies put the burden of paying them on big corporations that can afford to do so.

Essentially, it means the poor get healthcare, the rich pay for it, and small business owners can expense it as a reduction in tax liability.

What do you suppose you'd do if you were an employer (a corporation) with global media reach who didn't want the government to force you to pay for your workers' health care?

Well, I think you'd invest a lot into propaganda teaching people that rich corporations shouldn't pay it, the government (aka poor taxpayers) should pay for it.

And that's why so many people are under the same impression that you have (or had).

This is not accurate. If you move out of the Netherlands as a Dutch citizen you definitely still have to file your IRS for at least a couple of years (until "computer says no"). Even with no assets or income from Netherlands.

Source: I did it.

And of course if you have assets in The Netherlands of any kind you'll have to keep filing IRS as long as you have anything going on there.