Tax Implications of Portuguese American Dual Citizenship

Based on my Internet based research into this idea and some questions I asked to the people working at the Portuguese Consulate in Boston, I have found that as long as I live in the America, I will never have to pay taxes to the Portuguese government.

If I were to start working for a Portuguese company here in the states, there might be a chance that I would have to pay taxes to the Portuguese government. This will require further research or consultation with someone with more knowledge.

If I were to one day to pick up and move over to Portugal to live a new life, I would most definitely have to start paying Portuguese taxes.

2012 Portuguese Tax System Brochure

An interesting twist is that if I were to live in Portugal as a dual American citizen, I would still have to file income tax paper work and pay some taxes to the American government. It looks like there is a possibility that the numbers could zero out and no taxes will have to be paid out to the American government. This is something that almost no other country in the world requires of their expatriated citizens. My parents have never paid a dime or filed any paper work to the Portuguese government on the income they have made in America.

Another thing to be aware of is with having a Portuguese bank account. Foreign banks are now required to report to the American government any American citizens that hold accounts with them. The law is called FBAR and it effects Americans who have an aggregate amount of $10,000 or more.

Another interesting thing to think about are the taxes implications if I was to use my Portuguese citizenship to live elsewhere in the European Union. Some quick research reveals that I would definitely have to pay taxes in the country I would choose to live in and most likely there is a treaty between Portugal and my new home country that eliminates any chance of double taxation. A lot of this depends if I get classified as a resident of the home country or a posted worker.

Full disclaimer: I am not a tax accountant or lawyer and this information is based solely on my on-line research. Please, please, please, if you have any questions about tax implications, you should talk to a certified tax accountant familiar with international tax affairs!