Tax Implications of Living at Network School for Americans, Europeans, and Australians

Americans are taxed on worldwide income regardless of where they live. However, the Foreign Earned Income Exclusion allows you to exclude up to $126,500 of earned income in 2026 if you meet either the Physical Presence Test (330 days outside the US in a 12-month period) or the Bona Fide Residence Test. You must also file FBAR (FinCEN Form 114) if your foreign financial accounts exceed $10,000 in aggregate at any point during the year. Form 8938 (FATCA) applies if foreign assets exceed $200,000 at year-end or $300,000 at any point. Work with an expat-savvy CPA — firms like Greenback Expat Tax Services and Bright Tax specialize in this.

Most EU countries use the 183-day rule for tax residency — if you spend fewer than 183 days in your home country, you may cease to be a tax resident there. However, some countries (Germany, UK) have more complex rules that consider where your center of vital interests lies. The Netherlands requires formal deregistration from the municipal register. France may continue to tax you if your economic interests remain there. Malaysia does not tax foreign-sourced income through 2036, so you would potentially have no tax obligation in either country during your NS stay. This varies significantly by nationality, so get country-specific tax advice before making decisions.

Australia determines tax residency through a multi-factor test including the resides test, domicile test, 183-day test, and superannuation test. Simply leaving Australia does not automatically end your tax residency — you need to demonstrate that your ties to Australia are severed (no lease, no dependents staying behind, intention to be away indefinitely). If you maintain tax residency, Australia taxes worldwide income. If you successfully establish non-residency, only Australian-sourced income is taxed. Superannuation contributions are not affected by your residency status. Consult with a tax professional experienced in Australian expat matters.

Malaysia taxes residents on income derived from Malaysia. Foreign-sourced income is exempt through 2036. You become a Malaysian tax resident by spending 182 or more days in the country during a calendar year. For most NS members earning from foreign sources, this means zero Malaysian tax liability even as a resident. However, if you start earning Malaysian-sourced income (local consulting, Malaysian clients, JS-SEZ employment), standard Malaysian tax rates of 0 to 30 percent apply. The combination of Malaysia's foreign income exemption and your home country's FEIE or non-residency rules can result in legally minimized tax exposure.