taxes overseas/tax credit in US without paying taxes elsewhere?
As i am preparing to look into the opportunity to moving to Europe i have couple simple questions about taxation. I work for a non profit organization based in the US. This organization is looking to open an office in Europe and pay my salary in the US. Since i will live there more than a year, do i have to pay taxes ex in Germany or France since all my income comes and goes directly into a US bank? Also, am i eligible to get lower taxation in the US since i live overseas keeping in mind that i don't pay foreign taxes (if there is a way to do it)? Can that happen, or nothing changes and i am still paying the full amount in the US since my salary comes and gets deposited in here. Or am i subject to foreign taxes regardless?
Public Comments
- Whether you are taxed in the European country depends on that countries tax laws. If you're there for a significant time (for example more than a few months) it's likely that country will consider you a resident and therefore taxable. Back in the US, though, you are liable for all worldwide income. So no matter what you will be taxed there. If the country you're going to has a tax treaty with the US, you will likely get tax credits to avoid the double taxation effect. But you can assume at least your normal US tax rate, and perhaps higher depending on the country. BTW, unless you've got some good reason to want to keep money in the US, you'd be better off being paid locally. Otherwise all your living expenses will end up being converted at variable exchange rates and with a markup. If most of your income will be spent locally, you'd be way better off being paid locally.
