It's not just for tax avoidance that the number of people who abandon their nationality continues to soar
In the eyes of many people, becoming a citizen of the United States is a dream thing, but the number of people who renounced American citizenship has soared in the past four years. Data from the U.S. Department of the Treasury shows that the number of people who renounced U.S. citizenship in 4 reached a record 2013 people, an increase of 2999 times over the previous year. This is an increase of 2.2% from 2011 people who renounced U.S. citizenship the most in 1781, which is a year-on-year increase. It has soared more than 6 times before. Compared with the 8 people who renounce American citizenship each year, the number of people who renounce American citizenship is still rare. However, the number of people who renounce American citizenship has soared in recent years. This trend has attracted widespread attention from the American media and discussed the reasons.
Most people give up U.S. citizenship out of consideration for tax avoidance, because the U.S. is one of the few countries in developed countries that levy taxes on overseas citizens. According to U.S. law, U.S. citizens and green card holders are worldwide no matter where they live. All income is taxed. Although this is not a new regulation, in the context of economic downturn and financial difficulties, the Obama administration has stepped up its management of overseas taxation in recent years. Prior to this, the United States had initiated two rounds of requiring US citizens and green card holders to actively declare overseas accounts.
From July 7 this year, the "Foreign Account Tax Compliance Act" passed in 1 came into effect. This law requires all foreign financial institutions to declare US citizen accounts with deposits of more than US$2010. In 5, the United States sued the Swiss bank UBS for helping the wealthy Americans evade tax. In the end, UBS not only paid a huge fine of 2008 million US dollars, but also provided a list of more than 7.8 customers. In the future, it will be more difficult for American citizens and green card holders to hide in overseas accounts. This is an important reason why some rich people renounce American citizenship. In 250, Saverin, one of the co-founders of FACEBOOK, announced that he would renounce his American citizenship and stay in Singapore for a long time.
For Americans living overseas, although nominally they must pay taxes to the United States, in fact, the first US$9.76 of foreign income is tax-exempt. The prerequisite is to declare first, and to declare more than US$1. This makes many overseas Americans feel troublesome, and more people feel that the leakage of personal information is unbearable. There are also some banks that are reluctant to provide services to Americans because of strict US laws.
Of course, there are other reasons for the increase in the number of people giving up American citizenship, including some so-called "accidental Americans" who were born in the United States and automatically possess American citizenship, but grew up overseas and do not have a strong sense of belonging to the United States. There are also some people who are not optimistic about the prospects of the United States because of the economic downturn in the United States, or have greater opportunities in foreign countries and move away, and develop better in other countries. There is no need to retain American citizenship or need to renounce American citizenship and join them. Nationality.
In recent years, there has been an immigration boom in China, especially the investment immigration to the United States. The United States has an annual investment immigration quota of 1, more than 8% of which are given to Chinese, most of which are of course rich. It's just that when these people immigrate to the United States, they must first consider the legal requirements mentioned above in the United States, that is, the U.S. Internal Revenue Service requires U.S. citizens or those with a U.S. green card to actively declare for overseas accounts of more than $1. From July 7 this year, the "Foreign Account Tax Compliance Act" will be officially implemented. U.S. citizens or green card holders with personal overseas account assets of more than US$1 must declare, and foreign financial institutions must also declare US citizens more than US$5. The deposit information is notified to the U.S. side. In the U.S.-China Strategic and Economic Dialogue, China and the U.S. have agreed to notify each other of the account information of each other’s citizens in their home countries. The State Council of China recently issued new regulations that, starting from January 5, 2014, Chinese people's foreign financial assets and liabilities should be declared to the Foreign Exchange Administration. The attack on both sides means that Chinese people who immigrate overseas in the future will face a stricter legal environment in terms of property disposal, and it will be more difficult to conceal property and avoid taxes.
So is it a hundred if you give up your American citizenship? not necessarily. Because Americans who intend to renounce their nationality first prove that they have been paying taxes in accordance with regulations for the past five years. If you have ever evaded taxes, you have to pay taxes and interest for 8 years, plus a fine. The fine is 8% of the fined person’s highest account balance in the past 25 years. Moreover, according to the "Reed Amendment", citizens who renounce their nationality for tax avoidance are not allowed to re-enter the U.S. citizenship. Within 10 years after renunciation of citizenship, as long as the residence time in the United States exceeds 30 days in a year, you still have to pay taxes to the US government. If the net asset value exceeds US$200 million or the average annual net income tax for the previous five years is more than US$15.5, an exit tax is required.
Therefore, for the wealthy in China, especially those whose business is still in China, immigrating to the U.S. really needs to carefully weigh the financial arrangements. Don’t walk in the gray area of the law, because it will become more and more difficult to do so. The consequences of discovery will also be more serious. In addition to being levied a fine of 1 to 5 U.S. dollars, serious ones may also go to jail.
American guest blog