400,000 US Expats Ready To Renounce Citizenship Over FATCA

Around 400,000 American expats have plans to renounce their US citizenship mainly due to strict FATCA tax rules, according to a new survey.

The poll by international tax service Greenbacks asked Americans living overseas if they plan to give up their citizenship because of the Foreign Account Tax Compliance Act (FATCA).

One in 20 (5%) said they are already planning to do so, while 19% admitted that they had not yet decided what to do and another 43% said they would not rule out the move.

Half of those giving up US citizenship would do so because of the red tape that comes with filing under FATCA.

The law requires foreign financial institutions to report details of any accounts controlled by US taxpayers.

FATCA is top expat issue

Expats are exempt unless their accounts top a minimum $200,000 limit.

The US has an estimated population of 8 million expats, according to the US State Department.

The survey also found that 57% of expats would welcome any move to repeal FATCA and 10% are trying to find a new bank as their existing provider has declined to deal with Americans.

Greenback says the research highlights that the most important issue for US expats was FATCA.

“Reports have shown that in the last quarter of 2016, the time period coinciding with the election of Donald Trump to the US Presidency, nearly double the amount of people renounced their citizenship as compared to the same period in 2015. Greenback survey data provides further evidence that expats aren’t, at large, enamoured of Donald Trump,’ said David McKeegan, co-founder of Greenback Expat Tax Services.

Trump does not represent US expats

“The vast majority of expats don’t feel their interests are fairly represented by the US government and continue to be frustrated by the obligations of citizenship based taxation and the burdensome tax filing process.

“This year’s survey once again reinforces the fact that only a small percentage of Americans abroad feel their needs are acknowledged and advocated for. That perception, plus the strain that comes with onerous expat tax obligations, makes renouncing citizenship a desirable option for many.”

A coalition of lobby groups led by Nigel Green, CEO of deVere Group, a leading financial advice organisation for expats, is campaigning for the repeal of FATCA.

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400,000 US Expats Ready To Renounce Citizenship Over FATCA
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3 COMMENTS

  1. To me, the real issue is citizenship-based taxation. That is the real issue. And that´s the real nightmare for me and for many, if not all US expatriates. FATCA is secondary.

  2. A justification of taxation as provided by Immanuel Kant is the provision of services, by a government to residents, and the protection of property (police, laws, courts, army).

    Once one is tax resident in another country, then the U.S. no longer provides government services (roads, hospitals, unemployment, etc.). Nor does the U.S. provide for the protection of property for U.S. persons in other countries. Therefore, the U.S. is not justified in claiming the 9 million U.S. persons living overseas as tax residents of the U.S.

    When one is tax resident in another country, then this other country is justified on taxing on your worldwide income (through their Internal Revenue Service) as they provide government services and protection of property.

    A nasty part of the U.S. tax code,is the prescription is the surreal claim that U.S. persons resident in other countries are also resident in the U.S. for U.S. income tax purposes. On top of this the U.S. tax code has extra penalties and compliance for “foreign” accounts, assets, income, retirement funds, etc.

    All other countries in the OECD practice residence based taxation. The U.S. should shift to Territorial/Residence Based Taxation and stop disadvantaging US persons overseas compared to nationals from all other countries.

    Any U.S. Persons caught up in this must visit the message boards of The Isaac Brock Society and Facebook CitizenshipTaxation and AmericanExpatriates. FixtheTaxTreaty also delves into why tax treaties are flawed (Australia in the case of this website).

  3. If FATCA is the primary reason so many people are interested in renouncing, why implicate Trump – who did not create FATCA and is the president in a position to have the law repealed?

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