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Comment by mcv | Hacker News Reader

EU banks also have special rules for US persons. There are special courses on how to properly determine whether someone counts as US person or not. Nobody cares about other countries.

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Isn't the US the only country that taxes the foreign income of its citizens, which would probably require that the banks have some paperwork particular to US citizens with accounts?

Yeah, the special rules for U.S. persons are a result of U.S. forcing banks doing any business in U.S. to apply special rules to U.S. persons. https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...

One of my Dutch banks, a small investment bank, kicked me out because I am on a temp visa in the USA. This means I have to pay taxes here and therefore need to report my Dutch bank accounts with the IRS. They told me the US penalties for not reporting 100 % correctly on my money with them were so outrageous that they preferred to boot me.

Wait, even as a non-citizen you have to report and pay taxes on income earned outside the US if you earn any income in the US?

U.S. residents, including temporary residents, are considered "U.S. persons" by the IRS and have to report everything. Amusingly this also applies to holders of U.S. Green Cards who aren't actually resident in the U.S.

Canadians working in the U.S. have had fun with IRS because a type of Canadian registered (tax-advantaged) savings account is not recognized by the IRS as a registered savings account but rather a "passive foreign investment company" and IRS loves to make people fill out lots of paperwork. This is apparently because IRS rules haven't been updated in the 10 years since the account type has been created.

There is this problem in multiple countries I believe. From what I understand, the US asks you to report what you earn outside of the US but also what you paid as taxes. If the foreign country has a tax treaty with the US you would only pay the difference (in case the US taxes are higher than the foreign).

Yes. If you're a US person or a US citizen living abroad, you pay income tax in all of your income wherever it is earned. And even most states claim this too. If you live in Colorado and travel one time to earn a consulting fee in New York you must pay New York state income tax on the money earned in New York, and claim it as a credit with Colorado. That means filing IRS forms, Colorado income tax forms, and New York income tax forms.

It's such a bureaucratic clusterfuck for a small business or consultant.

It might not be the only country, but such taxation practice is definitely not the norm.

Unfortunately, there's little chance of normalizing the laws with international custom, since I can already see the attack ads about tax breaks for the wealthy.

Estonia is the only other country which taxes citizens on foreign-earned income.

That's just not true: https://en.wikipedia.org/wiki/International_taxation

A lot of countries tax foreign-earned income, but still US is a outlier along with Eritrea, with taxing foreign income of nonresident citizens.

Oops, I wrote Estonia instead of Eritrea. Too late to edit my comment.

Ahh, and I forgot to specify "non-resident". Sort by "taxes foreign income of non-resident citizens": http://i.imgur.com/hSsVmwd.png

Sorry.

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