FlagSageCitizenship-based taxation
Glossary term
Citizenship-based taxation is a system in which a country taxes its citizens wherever they live, as the United States does.
The United States taxes its citizens who live abroad. The IRS says US citizens and residents living or traveling outside the United States generally have the same filing obligations as those at home. Whether a return is due depends on gross income from worldwide sources, filing status and age.
Living abroad can open access to US relief such as the foreign earned income exclusion and the foreign tax credit. These are claimed on forms filed with a return. They do not remove the filing duty itself.
Tax treaties usually do not change this for citizens, because of the saving clause. Giving up citizenship has its own US tax rules, including the expatriation tax for some people.
Not to be confused with
- Tax residence. Tax residence depends on where a person lives and their ties, while citizenship-based taxation applies because of nationality alone.
- Exit tax. The exit tax applies to some people when they give up US citizenship or long-term residence, not to citizens who simply live abroad.
Sources
- U.S. citizens and residents abroad - Filing requirementsOfficial guidance
- United States income tax treaties - A to ZOfficial guidance
- Expatriation taxOfficial guidance
Related
- Countries covered
- General
- Sources
- 3 sources
- Tax year
- Current rules as checked
- Review
- Not professionally reviewed
Sources checked November 8, 2026