this post was submitted on 09 Jun 2026
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Why does the US tax people based on citizenship? (feddit.org)
submitted 1 day ago by TacticalRaptor@feddit.org to c/asklemmy@lemmy.world
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The only “way” to really avoid it is renouncing the American passport (if they are a naturalized citizen of the country they have moved to first). Like this: the individual has moved abroad to another country under an US passport at first, but they still owe taxes to the US government despite them not physically being there even though they’re earning a foreign paycheck (until they surrender their passport for another not considering dual citizenship).

Why don’t digital nomads consider naturalization rather than living under a Golden Visa? I know that Portugal or Spain for instance is popular towards digital nomads, but should they renounce their American passport into becoming a Spanish or Portuguese citizen? Also, why don’t Western expats living in Dubai consider Emirati citizenship (they do not recognize dual citizenship, though) if they consider the UAE their new home?

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[–] med@sh.itjust.works 2 points 1 day ago* (last edited 1 day ago)

Other people have answered this question but, it's worth noting that it's different per country, but there are at least two types of reporting treaties. Type 1, they report to the local government who does the reports to the IRS, or Type 2 where the businesses (FFIs, foreign financial institutions) themselves report account info directly to the IRS via online FATCA portals.

There are very few Type 2 countries.

Edit: Adding links

https://www.irs.gov/businesses/corporations/fatca-governments

https://worldpopulationreview.com/country-rankings/fatca-countries