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    Super Cheap

    • Chitré, Panama
    • Santa Marta, Colombia
    • Phuket, Thailand
    • Dumaguete, The Philippines

    Cheap

    • Medellin, Colombia
    • Boquete, Panama
    • Kyrenia, Cyprus
    • Hua Hin, Thailand
    • The Algarve, Portugal

    Affordable

    • Valencia, Spain
    • Cascais, Portugal
    • Las Terrenas, The DR
    • Pisa, Italy
    • La Rochelle, France
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    • Ambergris Caye, Belize
    • Kotor, Montenegro
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  • Home
  • Countries

    Top Destinations:

    Whether you’re looking for fun and sun, a peaceful retirement, or the chance to earn some extra income, you’ve got a real world of opportunity open to you… In short, we’ve done our best to narrow down your best options, but only you can decide the right country for you.

    • Spain
    • Portugal
    • Panama
    • Belize
    • Colombia
    • Cyprus
    • Mexico
    • France
    • Montenegro
    • Browse All Countries

    Best For:

    • The Best Places To Retire
    • Health Care Abroad
    • Cost Of Living
    • Investing in Real Estate
    • Establishing Residency
    • Gun Laws In The World
    • English-Speaking Countries
    • Safest Places For Retirement
    • Best Places In Latin America
  • Budgets

    How Much Will It Cost You To Live Overseas?

    The only honest answer is, we have no idea. And neither does anyone else. The only one who can answer that question is you. Here’s the most important thing to understand about budgeting your new life overseas…

    Super Cheap

    • Chitré, Panama
    • Santa Marta, Colombia
    • Phuket, Thailand
    • Dumaguete, The Philippines

    Cheap

    • Medellin, Colombia
    • Boquete, Panama
    • Kyrenia, Cyprus
    • Hua Hin, Thailand
    • The Algarve, Portugal

    Affordable

    • Valencia, Spain
    • Cascais, Portugal
    • Las Terrenas, The DR
    • Pisa, Italy
    • La Rochelle, France
    • Mazatlán, Mexico

    Luxury

    • Ambergris Caye, Belize
    • Kotor, Montenegro
    • The Panama City Beaches
    • Paris, France
  • Resources

    Global Living

    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore & Diversification

    Making Money

    • International Real Estate
    • Banking
    • Employment
    • Investing

    Follow Us:

    • Meet Our Experts
  • Real Estate

    Buying Real Estate For Cashflow

    • Discover tips and strategies used by global property investing veterans

    Explore Our Latest Posts

    • Learn how to invest and purchase property abroad…

    Go To The Overseas Property Alert Site

    • How To Become Independently Wealthy And Fund The Lifestyle Of Your Dreams
  • Conferences

    Upcoming Events

    • Explore Our Events Site

    Live and Invest In Spain Conference

    Offshore Wealth Summit

    Greece Workshop

    VALENCIA, SPAIN

    Sep. 17-19, 2025

    PANAMA CITY, PANAMA

    Oct. 15-17, 2025

    VIRTUAL

    Nov. 13, 2025

    Learn More About This Event
    Learn More About This Event
    PRE-REGISTER
    Learn More About This Event
    PRE-REGISTER
    • MORE EVENTS

    Contact Our Events Team

    Toll-Free U.S. and Canada:
    1 (888) 627 8834
    From Outside North America:
    1 (443) 599 1221
    Working Hours
    Monday – Friday 08:00 am – 17:00 pm EST.

    Reach us with your questions by email at: events@liveandinvestoverseas.com

  • Store

    Unlock The World

    • Access Your Library

    Overseas Havens Reports

    • Expats' comprehensive destination guides

    Conference Kits

    • Hours of coverage  from our latests conferences

    Lahardan Books

    • Titles on living and investing around the world
    • Explore Our Store
    Your passport to a life well-lived abroad

    Services

    overseas living letter offers affordable retirement guidance
    The Simon Letter Wealth Protection Insights
    Global Property Advisor Global Investment Opportunities

    Our Customer Service team is here to assist with any questions or concerns CustomerService@LiveandInvestOverseas.com

  • My Library
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THE 10 BEST PLACES TO RETIRE IN 2025

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Home Taxes

5 Expat Tax Blunders To Avoid

Tax Myths

by Lief Simon
Feb 27, 2025
in Taxes
0 0
Palace of Pena in Sintra. Lisbon, Portugal. Famous landmark

Palace of Pena in Sintra. Lisbon, Portugal. Famous landmark. Stock Photo | Adobe Stock

There are plenty of advantages to living (and investing) overseas when it comes to your U.S. taxes.

But not having to file every year is not one of them…

Today, I’m going to bust five myths that are out there about expat taxes—and that’s the first of them.

Myth #1: Overseas, You Don’t Need To Worry About U.S. Taxes

This notion—which many people still hold—is just plain wrong.

Americans abroad have to file a tax return to the IRS every year, even if it’s just to tell them we don’t owe them any money.

The cost of this—both in time plus, in many cases, paying a tax preparer—is an unnecessary burden that, with the exception of the tiny African backwater of Eritrea, no other nation puts its citizens through when they move overseas.

The IRS stands alone when it comes to the reach and power of tax collectors in the developed world…

With this in mind, no matter where you move around the globe, you’ll still owe something to Uncle Sam every year, even if it’s just paperwork.

This leads me to the second myth I want to bust today…

Myth #2: Avoiding Taxes Is A Good Reason To Move Abroad

Sure, you can save some money by structuring your affairs in the appropriate offshore ways… That’s what I’m all about, after all.

But here’s what I always say: Don’t make major life decisions (like whether to move abroad) based on taxes alone.

If you do, it can easily translate into miserable living.

Several U.S. states, including Florida, Texas, and Nevada, impose no personal income tax. But personally, I wouldn’t move to any of those places because, frankly, I don’t find them appealing places to live.

No amount of tax savings is going to change that.

Your personal preferences when it comes to the best places to live may be different than mine… but you get my point.

The same holds when going offshore.

Don’t restructure or reinvent your life just to be able to take advantage of low tax bands… and don’t choose a country to move to based solely on its approach to taxation.

Go offshore for diversification and a better lifestyle.

When you do, arrange your affairs to take advantage of every (legal) tax benefit available to you in the place where you’ve decided you want to be.

Which brings me to Myth #3… Sort of the opposite idea to Myth #2—but many folks out there believe both…

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Myth #3: You’ll Pay Higher Taxes Overseas Than In The U.S.

There are plenty of places with good residency visa options that also have potential tax benefits… If it happens that the place that makes sense for your residency also comes with a favorable tax situation, all the better.

You should look for countries that tax residents jurisdictionally.

This is when a country taxes you on income earned in that country only, even though you’re a resident.

It’s this approach to taxation that creates the biggest opportunity.

Residing in a country where taxation is based on the jurisdiction, it’s possible to organize your affairs in a way that can reduce or even eliminate your tax burden.

Countries that take this approach to taxation are sometimes referred to as tax havens.

Panama—where I live and work—is a good example of this approach.

As a resident in Panama, you are taxed in Panama only on income earned in Panama.

It’s easy, therefore, to live in Panama as a retiree and owe no taxes locally.

Belize, Malaysia, and the Dominican Republic also tax jurisdictionally (but a foreigner could be subject to tax on certain foreign investment income in the DR).

Another approach a country can take to taxation is referred to as a remittance-based system.

This is when a country taxes you only on income you bring into the country. Income earned outside the country and not brought into the country (not remitted) is not taxable.

Myth #4: You’ll Automatically Owe Taxes In A Foreign Country Even If You Live There Part-Time

At the heart of this myth is an important issue to get to grips with in the offshore space: legal residency versus tax residency.

When sizing up the potential tax consequences, you have to consider two different aspects of spending time in a country…

The first is how much time you can spend in the country without obtaining legal residency.

The second is how much time you can spend in the country before triggering tax residency.

It’s possible to be a legal resident in a country without becoming a tax resident—if you don’t spend more than half a year there.

Meantime, you don’t have to be a legal resident to find yourself a tax resident if you spend more than half a year in a country, legally or not.

In the case of Portugal, you can’t spend more than 180 days per year in the country unless you obtain legal residency or you’re an EU citizen. If you are an EU citizen, you could come and go from Portugal indefinitely without having to worry about registering for residency. However, if you spend more than 183 days in Portugal in a calendar year, you’re technically considered a tax resident.

Get legal residency in Portugal under the country’s self-sufficiency visa option (the D7 Visa) and you’re meant to be in the country for a minimum 183 days per year. Spending that much time in Portugal makes you a tax resident.

The bottom line is legal residency doesn’t necessarily mean you are automatically a tax resident; and you can end up being technically a tax resident even if you don’t have legal residency.

It all depends on the country.

So, make sure you understand the rules for the country where you’re considering spending time before you get too far into your process.

Myth #5: As A U.S. Person, Living Overseas Means You’ll Owe Tax In Two Countries

I mentioned at the top of this article (Myth #1) that living in a foreign country doesn’t mean you can escape the need to file a U.S. tax return.

However, for many if not most Americans abroad, filing a return is all we will have to do… we won’t actually owe any taxes in the States.

This is thanks to double taxation treaties.

If the United States or Canada and your country of interest have a tax treaty, it will in almost all cases eliminate the possibility for double taxation—i.e., that both your new country of residency and your home country will demand a tax from you on the same income.

If you are tax-resident in Portugal, and you pay tax in Portugal—even if you are a U.S. citizen—you won’t owe tax on that same income in the U.S. Same holds true for most countries.

However, if your new residence demands a lower tax than your home country would, the IRS (or CRA in Canada) may demand the difference.

Stay diversified,

Lief Simon signature

Lief Simon Editor, Offshore Living Letter

Tags: Live abroadlive overseasU.S. Taxes When Living Abroad
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Lief Simon

Lief Simon

Lief Simon has lived and worked in 7 countries on 5 continents and traveled to more than 75 countries. His real estate investment career began with a $5,000 down payment on a three-flat building in Chicago. Less than three years later, Lief sold the building for a leveraged return of 3,000%—$150,000 in profit after closing costs and commissions.

From there, he turned his attention overseas and has bought property in 24 countries including France, Croatia, Portugal, Ireland, Belize, Spain, Argentina, Cyprus, Romania, and beyond. Thanks to his decades-long career as a global property investor, Lief has built a multi-million-dollar portfolio that includes rental properties, significant land holdings, and 7 personal residences.

Lief has established residency in 3 countries and acquired a second passport from Ireland.

In 2008 Lief and wife Kathleen Peddicord made the most important investment of their lives—a 215-acre oceanside finca, known as Los Islotes. There, on Panama’s largely undiscovered Veraguas coast, they’ve installed underground electricity, water, and internet and built a forever family home that sits at the heart of their ultimate vision: a gold standard private residential community for those in search of a true safe haven escape.

Lief’s latest book, “Cowboy Millionaire—The New American Pioneer,” collects all the wisdom he has learned in three decades of living and investing outside America.

He offers advice on international diversification in his twice-weekly Offshore Living Letter and monthly Simon Letter dispatches. For real estate investment opportunities, check out his monthly Global Property Advisor service.

If you’d like to meet Lief in person, join him for one of our upcoming in-country conferences. You’ll find further details here.

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To Live Overseas?

Super Cheap

  • Chitré, Panama
  • Santa Marta, Colombia
  • Phuket, Thailand
  • Dumaguete, The Philippines

Cheap

  • Medellin, Colombia
  • Boquete, Panama
  • Kyrenia, Cyprus
  • Hua Hin, Thailand
  • The Algarve, Portugal

Affordable

  • Valencia, Spain
  • Cascais, Portugal
  • Las Terrenas, The DR
  • Pisa, Italy
  • La Rochelle, France
  • Mazatlán, Mexico

Luxury

  • Ambergris Caye, Belize
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