If you're working in high-tax regions such as Western Europe or countries such as Japan, do whatever you can to reduce your foreign tax liability. To reduce your foreign tax liability, take full advantage of the local tax law. Check to see whether you qualify for such tax breaks before you arrive. If you don't take steps beforehand, you may not qualify for them. It's also smart to work with your company to reduce your foreign taxes.
Many companies offer housing allowances to make up for the higher costs of living abroad.
Negotiate to have your company sign the lease for your overseas housing instead of giving you a housing allowance. Some foreign countries levy less tax on in-kind housing than on cash housing allowances. To qualify, the foreign assignment generally must be expected to last no more than five years. In countries that haven't signed this agreement, you will be subject to local taxes used to pay benefits of that country's retirees. To be excluded from these foreign taxes and allowed to pay only the Social Security taxes, you must have worked in the US for the employer that sent you abroad for at least six months prior to departure.