The way most of the world works
Most countries don’t tax the income of their citizens who move away. In other words, a person who lives in a country is taxed based on their residence in that country.
If they move to another country, they are then taxed in that country and cease to be taxed in their former country. In essence the first country says to their departing citizens, “Good luck, and get in touch if you ever come back.”
Because taxation is based on where you reside, this near-universal approach is called residency based taxation.
The 2-country exception
There’s an alternative taxation model, called citizenship based taxation. The two countries that follow this approach choose to tax their citizens wherever they live in the world. These countries are the USA and Eritrea.
If you, as a citizen of either country, move abroad the tax authorities say, in essence: “Good luck and keep in touch forever. If you don’t, we’ll look for you, and penalties will be involved.”
Eritrean enforcement
Years ago Eritrean consular officials were found to be harassing Eritreans living in Toronto. A “guy” would show up at an Eritrean expat's home and demand that money be sent back to Eritrea or bad things would happen.
There was a public outcry, and Canada eventually expelled some Eritrean consular officials. At the time Canada didn’t object to the fact that American expats also had to send money to authorities back home.
Perhaps the difference was because American enforcement consisted of a threatening letter from the IRS. A letter is not as newsworthy as a threatening guy at one’s door.
Implications for American expats
What citizenship based taxation means to 🇺🇸 expats is this: You must keep the IRS informed about your worldwide income as long as you have US citizenship – even if you earn no money from US sources.
The amount you owe the IRS will depend on the tax treaty between your country of residence and the US. Such treaties often involve arrangements that prevent double taxation, but details vary by country.
As an American expat you have to serve two tax masters, one where you live and the IRS. Consequently your tax life is more complicated and expensive than that of an American who remained in the US.
Conclusion
Because the US has adopted the rare citizenship based approach to taxation, American expats are burdened by more complicated tax lives. This fact is rarely mentioned on websites touting retirement abroad or the nomad lifestyle.