Did you know that back in 2013 there was a 221% increase in the fee to renounce your American citizenship? That was only a year ago. Now, the U.S. State Department has just raised the fee for renunciation of U.S. citizenship to $2,350 from $450. The State Department says its reason for doing this has to do with demand on their services and all of the extra workload they have to process people who are emigrating. Over the course of the last two years, the U.S. has seen a spike in expatriations.
Part of the reason for this has to do with global tax reporting and FATCA. The presence or absence of tax motivation is no longer relevant, but that could change. AfterFacebook co-founder Eduardo Saverin departed for Singapore, Senators Chuck Schumer and Bob Casey introduced a bill to double the exit tax to 30% for anyone leaving the U.S. for tax reasons. That hasn’t happened, but taxes are still a big issue for many. In order to leave America, a citizen must generally prove 5 years of U.S. tax compliance. If you have a net worth greater than $2 million or average annual net income tax for the 5 previous years of $157,000 or more for 2014 (tax, not income), you pay an exit tax. Long-term residents giving up a Green Card can be required to pay the tax too.
In an article in Forbes.com, explains that a decision to expatriate from the United States “should never be taken lightly. Taxes or not, it can be a big step. And around the world, more people are talking about taking it.”
