If you’re a dual citizen, and you think the U.S. helps itself to far too large a chunk of your hard-earned cash, here’s a new lesson from Facebook cofounder Eduardo Saverin: renounce your citizenship, and you, too, can avoid a hefty tax bill.
Bloomberg reports that Mr. Saverin, a Brazilian-born resident of Singapore, has decided to forfeit his U.S. citizenship days before Facebook’s IPO, in “a move that may reduce his tax bill.” They pulled the information from a list published by the Internal Revenue Service that names people who have decided to renounce their citizenship as of April 30th.
According to Bloomberg:
Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can reduce their tax liabilities in this country….Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares.
Conveniently, Mr. Saverin’s country of residence–Singapore–doesn’t have capital gains tax, though he will be subject to a tax on the income he earned while living there. Poor guy.