- Home » Expat News » FATCA and complicated tax codes spur US citizenship renunciation
FATCA and complicated tax codes spur US citizenship renunciation
| Published: | 30 Sep at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
The huge rise in the number of Americans giving up their citizenship is being blamed on confusing tax codes and the introduction of FATCA.
In the year 2008, just 231 US citizens renounced their heritage and gave up their citizenship, but 2015 saw a record number of 4,279 Americans following suit, a 20 per cent rise on the number in 2014. A recent survey revealed 70 per cent of the 2015 number cited financial regulations and tax as the reasons for their renunciation.
In November last year, the US government attempted to stem the flow by increasing the renunciation fee by a massive 400 per cent to $2,350. This year’s total has yet to be complete, but Forbes Business Magazine reports it’s expected to be still higher in spite of the soaring cost of the procedure.
The article estimates the number of US taxpayers expected to give up their citizenship in the future could be as high as 5.5 million, all of whom are taxpayers. Nowadays, it seems it’s not just the fact of FATCA, it’s the need for even more complicated paperwork every year which is driving expat Americans to take this drastic decision. Basically, they’re sick and tired of the increasing demands it makes on their time.
It’s not just everyday expats who’re deciding they no longer wish to be Americans, it’s famous faces in the entertainment world such as Tina Turner. As her husband Erwin Bach explained, even although her decision wasn’t motivated by not wanting to pay tax, the way the tax system is set up didn’t encourage staying as citizens of one of only two world countries which tax their people no matter where they're living.
Expats living and working overseas are increasingly forced to employ accountants and lawyers to ensure their tax returns are compliant, whilst those unable to afford such help are doomed to spend weeks every year attempting to file returns whose convoluted regulations and rules they simply don’t understand. Even with professional help, the fear of FATCA's heavy fines is a very real part of the process.
In the year 2008, just 231 US citizens renounced their heritage and gave up their citizenship, but 2015 saw a record number of 4,279 Americans following suit, a 20 per cent rise on the number in 2014. A recent survey revealed 70 per cent of the 2015 number cited financial regulations and tax as the reasons for their renunciation.
In November last year, the US government attempted to stem the flow by increasing the renunciation fee by a massive 400 per cent to $2,350. This year’s total has yet to be complete, but Forbes Business Magazine reports it’s expected to be still higher in spite of the soaring cost of the procedure.
The article estimates the number of US taxpayers expected to give up their citizenship in the future could be as high as 5.5 million, all of whom are taxpayers. Nowadays, it seems it’s not just the fact of FATCA, it’s the need for even more complicated paperwork every year which is driving expat Americans to take this drastic decision. Basically, they’re sick and tired of the increasing demands it makes on their time.
It’s not just everyday expats who’re deciding they no longer wish to be Americans, it’s famous faces in the entertainment world such as Tina Turner. As her husband Erwin Bach explained, even although her decision wasn’t motivated by not wanting to pay tax, the way the tax system is set up didn’t encourage staying as citizens of one of only two world countries which tax their people no matter where they're living.
Expats living and working overseas are increasingly forced to employ accountants and lawyers to ensure their tax returns are compliant, whilst those unable to afford such help are doomed to spend weeks every year attempting to file returns whose convoluted regulations and rules they simply don’t understand. Even with professional help, the fear of FATCA's heavy fines is a very real part of the process.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
