Tell that to the IRS, which insists that even if you're working in a foreign country, for a foreign company, on foreign projects that they still deserve their cut.
This might sound like a pedantic correction, but IRS people I've spoken to are quite adamant about this: the people of the United States have, through their Congressional representatives, decided that they deserve a share of fellow citizens' foreign-sourced income.
The IRS has no discretion in this matter; they just deliver the bill.
Re:Detecting Money Laundering
by dandermotj on Sunday June 26, 2016 @07:51PM
(#11983428)
The US is one of the only countries on earth that follow this practice.
So does Canada.
Taxing a non-resident citizen's foreign income? No it doesn't. Once you declare yourself a non-resident, you don't even have to file a return anymore.
If the US doesn't acknowledge non-resident status, then you're right, Canada isn't like the US. However, as a Canadian who was "working in a foreign country, for a foreign company, on foreign projects" (in the US) for half a year, I can guarantee you that I had to pay both US and Canadian taxes on that income, and I very thoroughly investigated the case because in spite of all the treaties, I ended up double-taxed for a few thousand dollars' worth.
for half a year
That's the key part. I don't know the exact legalese, but you probably still qualified as a Canadian resident.
Once you're no longer regarded as a Canadian resident, you no longer owe Revenue Canada anything. It's a clean break.
In the US, no matter how long you live outside the country, as a citizen you still need to file a return and pay taxes on foreign income.
Yep. But it's not just time, to be a "non-resident for tax purposes", you have to close all of your Canadian bank accounts, renounce your government-provided health insurance, etc. I suppose it's not an unreasonable system.
Yes, the special case in the US tax code is that non-residency does not excuse you from paying taxes to the IRS (although I believe there is a non-residency tax deduction on the first $80k or so).
Because the wealth should be taxed in the place (country state, region etc.) where it was made (and whose resources were used in the process) and not where it appears in public.