I’m currently in the process of obtaining a passport to embark on the journey of acquiring US-Taiwan dual citizenship, with the ultimate goal of securing Household Registration (HHR) down the line.
While I’m excited about the possibilities, I want to be well-informed about any potential downsides or challenges that may come with this decision.
Additionally, I’m curious about the potential tax implications that may arise, particularly concerning US capital gains and overseas income (e.g. being a Taiwan tax resident).
I’ve heard there could be considerations for income over $200,000 USD. If anyone has navigated these waters or has insights on the tax side of things, I’d greatly appreciate your input.
Your insights, advice, or personal stories would be immensely valuable as I navigate this path. Thanks in advance.
I’m not a dual citizen, so I can’t speak of the costs of being a US citizen (you would know more than I do).
As far as I know Taiwan doesn’t care about income you earn overseas if not living in Taiwan. I may be wrong if the amount is over a certain amount though. Only cost if you choose to live in the US is having to come back every year so your NHI benefit do not lapse, and paying NHI premium (which for US income is nothing).
Americans have trouble opening bank accounts… Have fun with your FATCA forms
They also get targeted by Taiwanese partners for green cards and think they’re in love up until getting divorced in California where they lose half their assets… and the Taiwanese partner buys a new Bentley out of their pension funds.
“In California, a wife may be entitled to 50% of marital assets and 40% of her spouse’s income in various forms, but there are no solid guidelines to determine spousal support or alimony. Despite this, however, the aim of alimony in California is to maintain the standard of living for the lesser-earning spouse.”
I’m guessing you’re a U.S. citizen but dont have Taiwan citizenship yet? Not entirely clear what your current status is.
If you have Taiwan citizen parents and you have a NWOHR Taiwan passport, then it may be easier for you to achieve dual citizenship.
If you’re a U.S. citizen with no previous ties to Taiwan then you’d likely have to give up U.S. citizenship before you can gain Taiwan citizenship. That’s a pretty big drawback.
I can understand giving up Canadian citizenship X10 to get Taiwanese. Ditto for Australia, Italy etc. But US? Jesus. Maybe I am a US exceptionalist but that’s one I would never give up if I had it. (108) “… The rest of you are just visiting.” - YouTube
I guess the downside, to keep it on topic, is you have IRS obligations and they can be nasty compared to the benign nature of most tax authorities internationally.
My lad used to have a go at me for not having him born in the USA. Nowadays it’s I’m so glad I wasn’t born in the USA like Boris the UK Prime Minister who had to pay US taxes on a UK property he sold. He now realizes USA taxes the hell out of people no matter where they live.
He will be in Hawaii for 2 weeks vacation later this month with his wife and kids. USA great place to visit not a great place to live and work lol
You didn’t specify whether you plan to live in the US or Taiwan.
No downsides if you live in the US as a dual citizen (other than the existing downsides you’re already dealing with by living there, which are many).
Downsides if you live in Taiwan:
You have to put up with Taiwanese food
You need to pay taxes to both Taiwan and the US (on income over $120k USD)
You need to pay AMT on any passive income over $6.7m TWD generated overseas if you’re living in Taiwan (but the Taiwan government won’t know )
You and your bank in Taiwan need to file an extra report to the US government when you open a bank account here. In addition, if you have more than $10k USD combined in all your non-US bank accounts, you’ll need to file another report to the US government
You need to serve in the military if you’re an adult male under the age of 36
You need to enroll in the mandatory national health insurance program
Upsides if you live in Taiwan:
You get to enroll in the mandatory national health insurance program
You get to serve in the conscription military if you’re an adult male under the age of 36
If your income is paid to a US bank account, the Taiwan government won’t know. If that income is less than $120k USD annually, the US government won’t tax you. That means someone who is not the law-abiding type could potentially be living here tax-free (Disclaimer: I am not condoning tax evasion)
If you work remotely for a US company, or have passive income in the US, you’d be making US-level salary while spending Taiwan-level cost of living
You can receive government benefits from both the US and Taiwan (I received Covid relief money from the US, Taiwan, and Hong Kong as a triple citizen)
You get to live on a tropical island paradise with the same climate and natural landscape as Oahu (at least southern and eastern Taiwan), while spending significantly less than what you’d spend in Hawaii
I will have my next child born in the US LOL. At the time of my daughter I had no idea of the stupid law in America.
But in doing so, he or she can choose to renounce if it is best for him/her when grown up if it becomes burdensome in any way. But he/she will still have multiple other citizenships to fall back on lol
At what limit do you have to start paying taxes to Taiwan on U.S income when being a tax resident? I thought that was 6.7M NTD but am unsure. i assume the 120k you refer to is to the US govt.
It depends on the type of income: If it’s salary income, you need to start paying from the first dollar (well, there are exemptions, of course). If it’s „passive“ income, it will usually fall under the AMT/IBT rule and the 6.7m NT$ exemption will apply (you need to file your taxes over 1 million though).
As there is no double-taxation agreement between Taiwan and the US, Taiwan will usually not care about whether you also need to pay US taxes or not (in some cases, foreign-paid taxes might be deductible. In other cases not).
Ditto for Australia, Italy etc. But US? Jesus. Maybe I am a US exceptionalist but that’s one I would never give up if I had it.
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