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US renounce citizenship fee soars as thousands leave to avoid FATCA
| Published: | 16 Sep at 6 PM |
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The fee payable to the State Department by US citizens wishing to renounce their citizenship has soared by over 400 per cent since the introduction of the FATCA reporting system.
Originally just $450, the charge for renouncing US citizenship now stands at $2,350. State Department officials claim the new amount represents the actual cost of the procedure and are admitting that demand for the service is at an all-time high.
In some regions, the US Consular waiting list for the required expatriation interview is now six months or more. Around 75 per cent of all expatriation requests are processed in UK, Swiss and Canadian consular offices, with the State Department claiming that officials in these jurisdictions are spending substantial amounts of time adjudicating cases.
According to US State Department under-secretary Patrick Kennedy, there is no reason to set the fee below its costing level. The major reasons for the increase in numbers renouncing US citizenship are the country’s high taxes on expat income and investments and the recently-introduced FATCA tax compliance rules applied to overseas jurisdictions.
Disenchanted USA expats claim that the burdensome nature of the new tax forms is more of a reason for expatriation than the taxes themselves.The introduction of tax increases and FATCA has also hit hard on US companies, with many now relocating their headquarters to more business-friendly locations overseas.
Total relocations and expatriations are at present 20 times higher than in other high-income countries and, in addition to FATCA’s asset-declaration requirements, US expats are being hit by refusals of service by foreign banks unwilling to get involved with the new rules. The trend is spreading, and includes EU member states as well as local banks in Asian, African and South American countries.
Lock-outs by international financial firms are preventing US retirees from accessing their state and private pensions. American Citizens Abroad’s director, Marylouise Serrato, insists the lockouts are reality, not rumour, adding that restrictions are not confined to US banks.
Originally just $450, the charge for renouncing US citizenship now stands at $2,350. State Department officials claim the new amount represents the actual cost of the procedure and are admitting that demand for the service is at an all-time high.
In some regions, the US Consular waiting list for the required expatriation interview is now six months or more. Around 75 per cent of all expatriation requests are processed in UK, Swiss and Canadian consular offices, with the State Department claiming that officials in these jurisdictions are spending substantial amounts of time adjudicating cases.
According to US State Department under-secretary Patrick Kennedy, there is no reason to set the fee below its costing level. The major reasons for the increase in numbers renouncing US citizenship are the country’s high taxes on expat income and investments and the recently-introduced FATCA tax compliance rules applied to overseas jurisdictions.
Disenchanted USA expats claim that the burdensome nature of the new tax forms is more of a reason for expatriation than the taxes themselves.The introduction of tax increases and FATCA has also hit hard on US companies, with many now relocating their headquarters to more business-friendly locations overseas.
Total relocations and expatriations are at present 20 times higher than in other high-income countries and, in addition to FATCA’s asset-declaration requirements, US expats are being hit by refusals of service by foreign banks unwilling to get involved with the new rules. The trend is spreading, and includes EU member states as well as local banks in Asian, African and South American countries.
Lock-outs by international financial firms are preventing US retirees from accessing their state and private pensions. American Citizens Abroad’s director, Marylouise Serrato, insists the lockouts are reality, not rumour, adding that restrictions are not confined to US banks.
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