| @Troy, I think to gain information on living standards and cost of living in Shanghai, you have certainly come to the right place for advice. However, as for the question concerning US citizenship and taxation implications, my advice to you is to seek professional advice. Although you may get some sound opinions and first-hand experiences here, this blog is not the appropriate forum for this sort of advice. Taxation is a very personal matter, and each individual will face different issues, depending on income, assets, investments etc (at home and abroad). To outline this a little further, let me share my own experience. I have lived and worked abroad for a number of years. Now I know obviously, Australian and SG tax laws are much different to the US and China - I am merely offering my case as an example of why professional advice is warranted. My family and I are currently, residing in Singapore on P1 employment pass and dependent passes. When I made the shift to SG, I was allocated the services of a 'global' taxation partner (PCW) through my company, who assisted in my tax matters in both Australia and Singapore. It became glaringly obvious early, that the state of my residence in SG had some (but very little baring) on my tax position. There are many taxation advantages by residing in SG whilst maintaining a 'non-resident for taxation purposes' in Australia.... this is the critical point - if I retained substantial assets back home (eg. house, shares, other investments, etc) or received any form of income (inc. significant interest dividends etc) in Australia, I would need to continue as a 'resident for taxation purposes' in Australia - this would negate any taxation benefits in SG, because I would have to pay an 'equalizing' tax (or if you like, double tax). By 'liquidating' and selling off Australian assets, I am now taxed only in SG at a much much less rate than I would be if I were still in Australia. This as I said, as an employment pass holder... we will become PRs (permanent residents) of SG in a month or two, which offers a couple more percentage points in tax advantage, but to move toward citizenship would offer only a further small incremental gain. This would not be acceptable given my loyalty to my country and heritage (Australian through and through, regardless of where in the region I reside). Also, although Australia recognizes dual citizenship, SG do not (nor do China), and I would not be relinquishing by Aussie status for one or two percentage points of tax gain - totally unacceptable to me. Finally, a very important point to note, is the usage of the term 'expat'. Although, all of us on overseas assignments 'generally' refer to ourselves as expats, it is critical for you to understand the business implications and translation of this term. If you are an 'expat' in it's true business sense, your company will be sponsoring all your costs (living away from home allowance, driver and vehicle, regular R&R and associated travel costs, etc etc), and this money would be paid from your home country (hence the potential for heavy taxes), but generally these packages are quite attractive - I suspect this is not the case for you, because a US$75K package wouldn't cut it (wouldn't even come close). Your HR dept should be able to advise you on this - that's what HR professionals are paid to do - they should have the knowledge base on this. Anway - I've been super long-winded - in short, you MUST engage professional advice on the taxation matters - as you rightly point out, this is a life changing opportunity and you should therefore give the decision the respect it deserves by doing your homework completely. PD: Disposable Income? - depends on you - how do you spend your time? Window shopping or shopping at Gucci? That's a real tough question without the background. |
Living Cost in Shanghai - Part II