Legal Ramifications of Dual Citizenship

Over 25 million Italians have emigrated between 1861 and 1960 with a migration boom between 1871 and 1915 when over 13,5 million emigrants left the country for European and overseas destinations.
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JLDeLuca
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Legal Ramifications of Dual Citizenship

Postby JLDeLuca » 18 Aug 2010, 02:29

I've read the basics, such as you can't be taxed in both countries, but you can vote in both; and mandatory military service is a thing of the past. Are there other legal issues one should be aware of before pursuing dual citizenship?
Thanks

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johnnyonthespot
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Re: Legal Ramifications of Dual Citizenship

Postby johnnyonthespot » 18 Aug 2010, 12:31

1) Just because there is no mandatory military service right now, does not guarantee that there will not be mandatory military service in 2, 5, or 15 years - possibly when your children or grandchildren are coming of age.

2) Yes, there is dual taxation. The US taxes all worldwide income of US citizens but allows for the first $80-something thousand to be exempt. See http://www.irs.gov/businesses/small/int ... 54,00.html

3) Dual US/Italian citizens cannot be employed on US military bases (and possibly other US government installations) within Italy. This is due to "Status of Forces" agreements which require military bases which employ "local civilian labor" to meet all Italian labor and tax laws. As a dual citizen, when in Italy, you are an Italian citizen and thus subject to Italian labor laws. See http://rome.usembassy.gov/ussso/files/shell.pdf

4) The US may balk before issuing high-level security clearances to dual citizens, even when the other country is on the "friendly" list. If you or your children plan a military or strategic science career, this is something to consider.

5) If you happen to die on Italian soil, I believe that Italian inheritance and other laws concerning death will supersede any plans you may have already made. I would suggest that if you plan to actually reside in Italy for any length of time, you discusss this topic with a competent Italian attorney and have an appropriate will drawn up.

6) If your marriage is not strong, adding a second citizenship into the mix could possibly be used to advantage by one spouse or the other.

Those are just a few which come to mind. In my opinion, anyone who has or hopes to have substantial assets, or who is in or believes he/she might one day be in a failing marriage, should discuss dual citizenship with a competent attorney.
Carmine

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MST995
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Re: Legal Ramifications of Dual Citizenship

Postby MST995 » 18 Aug 2010, 14:41

To elaborate on the taxation issues, you still have to file a US return, you would just have to fill out a 2555 foreign income exclusion form and generally you wouldn't owe anything to the US. Furthermore, if you make more than the threshold($91,400 in 2009) you are only liable for the taxes BEYOND what you paid in Italy (you would fill out an 1116 and receive a foreign tax credit). I'm not sure what the italian tax rates are, but if they are higher than US rates, you would not pay anything because the foreign tax credit would exceed the US tax liability (note that for obvious purposes you will not receive a US refund for a credit in excess of US tax liability). Either way you have to file a U.S. return as well as an italian return, but the US return is pretty painless. Oh and one more thing.... this is not tax advice!!!! (can never be too careful!)

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Re: Legal Ramifications of Dual Citizenship

Postby JLDeLuca » 18 Aug 2010, 17:21

Thanks, Carmine and Jets Fan! I understand, no legal or tax advice, just looking for hot spots or areas of concern. Those are all good points.

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Re: Legal Ramifications of Dual Citizenship

Postby MST995 » 18 Aug 2010, 17:39

You're welcome. Oh, and I should clarify that the taxation isn't REALLY a disadvantage to obtaining dual citizenship because even if you were not a dual citizen (US only) living/working in Italy, the same tax rules would apply and you would be required to file returns to both countries.


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