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As a Dual Citizenship


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#1 Mel's

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Posted 12 June 2013 - 07:44 PM

Hi WOF, I just wanna know being a Dual Citizenship you think I might end up paying taxes for both countries? Hope to hear some replies ;-) Thank you!

#2 Fritz

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Posted 12 June 2013 - 10:05 PM

The income tax is the main one to worry about, other taxes are usually residence dependent.

The income tax varies based on  income sources and residence

 

* Under current law (2013) *

Philippines and US have a Tax Treaty granting tax breaks to their citizens who have an income from the other country or reside in the other country.

Remember also to check the current year's rules for deducting foreign taxes paid on each income tax return you will be filing :)

 

Philippines

Individuals
Resident citizens receiving income from sources within or outside the Philippines
employees deriving purely compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year

employees deriving purely compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return
self-employed individuals receiving income from the conduct of trade or business and/or practice of profession

individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession

individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax

individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing

marginal income earners
Non-resident citizens receiving income from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the Philippines
Corporation shall include partnerships, no matter how created or organized.
Domestic corporations receiving income from sources within and outside the Philippines
Foreign corporations receiving income from sources within the Philippines
Estates and trusts engaged in trade or business

You may also be required to pay certain other taxes such as Estate Tax or Donor's Tax in some circumstances.

You can learn more at the BIR website.

 

United States

On the US you will mainly be affected by the Income Tax.  This tax applies to US citizens with an income, non-resident aliens with a US derived income and US resident aliens with an income.  For most of the non-resident aliens it will be a matter of claiming a refund for estimated taxes withheld, but there are circumstances that can cause them to owe taxes under US law.  Again though there are occasional laws such as Gift Tax (American version of Donor Tax) and Estate (Inheritance) Taxes that can bite.

The IRS will be able to supply you with the forms & information pamphlets that attempt to explain the US tax code. Forms & Pubs start page.

 

As a start be sure to read the following Pubs: (I have linked HTML versions)

Publication 17 (2012), Your Federal Income Tax

Publication 54 (2012), Tax Guide for U.S. Citizens and Resident Aliens Abroad

Publication 501 (2012), Exemptions, Standard Deduction, and Filing Information

Publication 505 (2013), Tax Withholding and Estimated Tax

* In Pub 505 you learn that in 2013 the following change occurs which applies to US taxpayers living outside US.

* "Foreign earned income exclusion. The maximum exclusion has increased to $97,600." 

Publication 514 (2012), Foreign Tax Credit for Individuals

Publication 515 (2013), Withholding of Tax on Nonresident Aliens and Foreign Entities

Publication 517 (2012), Social Security and Other Information for Members of the Clergy and Religious Workers

* This pamphlet covers Social Security & the Income tax.  There is also additional unrelated information for others.

Publication 519 (2012), U.S. Tax Guide for Aliens

Publication 525 (2012), Taxable and Nontaxable Income

 

The full list of (most recent year) Forms & Pubs available

Pubs available in HTML (readable online)

You can order forms and pubs for earlier years from the IRS.  See the http://irs.gov webpage for links.  These forms & pubs are regularly updated, so for anything that does not say it is for the year you are concerned with, check the IRS site for a newer edition or send them a request for an older edition of the Form or Pub.

 

To summarize all that gobbledygook.  There is no easy answer.  There are very definite benefits to Dual Citizenship and some downsides.  You gain some tax breaks and pick up other tax liabilities.  This decision needs to be done on a case by case basis by someone familiar with your current situation and future plans.

 

Another consideration is that when the foreign citizen will be moving to Philippines, the Philippine spouse may wish to gain naturalization before returning so that they will be free to return if disaster strikes and they lose their spouse.  Not having this freedom to return can make it difficult for an alien parent to visit children living abroad for example.

 

So be very sure to review the costs, the benefits, and above all, plan on the basis of minimizing complications in the event of a disaster, whether it be natural or personal.

 

My abject apologies for not being able to give you a clear, easy to understand answer 

 

The adventures continue

Fritz

 


May you find what you want in life,
know it when you see it and
have the good luck to get it
... and keep it!!!


#3 MrkGrismer

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Posted 13 June 2013 - 01:03 PM

Generally speaking, if you live and work in one country then you pay taxes in and to that country. Complications arrive if you have income coming in from a business in another country, if your job takes you back and forth between the two countries (normally where the business is headquartered is most likely the country you would be paying taxes to), or if you have a different job in each country.

If you are like most people, and are just living and working in the U.S. and have dual-citizenship you will generally pay U.S. taxes just the same as any other U.S. Citizen.

Edited by MrkGrismer, 13 June 2013 - 01:04 PM.

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http://www.uscis.gov...0004718190aRCRD
 

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#4 Mr. Lee

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Posted 13 June 2013 - 01:44 PM

My question related and to follow up is, if a Filipino is living in another country besides the Philippines, then what advantage is there for them to be a dual citizen except being able to vote? Lets face it, those votes probably do not count anyway. 

 

I remember years ago when Philippine citizens living in other countries were required to file Philippine income tax returns (luckily that has stopped), even if no income was earned (my wife had to file those for a few years when she first moved to the US and the Philippine govt required copies of my our joint tax return to prove my wife had not earned any income, which giving such returns really upset me), so what is to say that will not happen again someday so that the Philippines has a clearer understanding of how much some of their citizens are making abroad and if that should happen, would they then see dollar signs they could possibly find a way to tax in one way or another to increase their bottom line. Of course that is an unknown but they had a reason in the past for Philippine citizens to file income tax returns yearly to them, so what other idea might they come up with. 

 

So no as already posted there are no taxes due the Philippines for income earned outside the Philippines right now but my thoughts are that could change someday.


Retired, happily married since 94 & live part time in Cebu City and the rest of the time in Florida, USA.


#5 MrkGrismer

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Posted 14 June 2013 - 01:22 PM

The biggest advantages, IMO, of being a dual-citizen are:

1) If you are in a third country and things go south, you may available upon the citizenship that will get your butt to safety most expeditiously.

2) If you decide to retire in the Philippines you have all the rights and privelidges of a Philippine Citizen with no worries.

If you believe Modern Sporting Rifles have a legitimate use, please like, share and participate on: https://www.facebook...tamateSportsmen

http://www.uscis.gov...0004718190aRCRD
 

Medical Exams – A caller explained that the civil surgeon who completed the medical exam used the wrong form and then wanted to charge an indigent refugee to reprocess the paperwork on the correct form. What recourse does an applicant have if this occurs?

USCIS Response: Customers should notify the Director of their local office when they have a complaint about a civil surgeon.





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