Facebook Co-Founder Saverin Gives Up Citizenship Before IPO

Tax refugees? Maybe, maybe not, read an article this morning, that many of the FB gang, including Zuckerberg himself continue to live in high tax state California.
Maybe Gov. Brown the Sequel can't wait for this IPO to help his debt ridden budget.

The guy was from Singapore. Some people make decisions on saving $ rather than lifestyle. I I were making billions, I would not be in Singapore(been there).
Too each there own , there is only so much you can spend. i doubt this was about tax rates but if it was good luck and goodbye he made his fortune here and he should not whine about a few % points. IMHO

Although Mr. Saverin will have to pay a hefty exit tax for renouncing his citizenship, based on some calculation of his assets, Singapore is a relatively low-tax jurisdiction, particularly for foreign investors, and does not levy capital gains tax. Thus he could save in the longer term.

But it wasn't just because of taxes- it's also the regulations that this guy has to consider...

It’s true many U.S. expats complain that American rules are making life more difficult for them. Those include the U.S. tax system’s global reach (many countries tax based on residency); foreign bank account reporting rules; and the Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to start reporting to the IRS on U.S. citizens’ accounts.

Expats say as a result of all the regulations, some foreign banks are dumping more U.S. customers. Mr. Goodman also cited FATCA, among other rules, as a problem for Mr. Saverin.

Read the whole story- just came out 3 hours ago.
http://finance.yahoo.com/news/facebook-co-founder--america-is-ok--it%E2%80%99s-the-rules-that-are-a-pain.html

This is going to give some Hollywood personalities heartburn...

Senators to Unveil the ‘Ex-Patriot Act’ to Respond to Facebook’s Saverin’s Tax ‘Scheme’

Sen. Chuck Schumer, D-N.Y., has a status update for Facebook co-founder Eduardo Saverin: Stop attempting to dodge your taxes by renouncing your U.S. citizenship or never come to back to the U.S. again.

In September 2011, Saverin relinquished his U.S. citizenship before the company announced its planned initial public offering of stock, which will debut this week. The move was likely a financial one, as he owns an estimated 4 percent of Facebook and stands to make $4 billion when the company goes public. Saverin would reap the benefit of tax savings by becoming a permanent resident of Singapore, which levies no capital gains taxes.

At a news conference this morning, Sens. Schumer and Bob Casey, D-Pa., will unveil the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act to respond directly to Saverin’s move, which they dub a “scheme” that would “help him duck up to $67 million in taxes.”

http://abcnews.go.com/blogs/politics/20 ... ax-scheme/

Democrat taxes... they will follow you from cradle to grave. I can't wait for folks like Johnny Depp to weigh in on this.

Actually, under the law, if one gives up their US citizenship due to tax issues, they can never reenter the US again, even for a visit.

Something the Dog Said wrote: Actually, under the law, if one gives up their US citizenship due to tax issues, they can never reenter the US again, even for a visit.

That can be hard to define. If the guy pays up in full before leaving, I think they would welcome him back.

So suppose employee Saverin comes back to FB HQ a couple times a year for board meetings, can the IRS & California tax him on earned income? They do this to football players when they go on the road for games.

If so, it might make sense for S. to videoconference from Singapore.

Something the Dog Said wrote: Actually, under the law, if one gives up their US citizenship due to tax issues, they can never reenter the US again, even for a visit.

That's what it says in the article... did you actually read it?

FredHayek wrote:

Something the Dog Said wrote: Actually, under the law, if one gives up their US citizenship due to tax issues, they can never reenter the US again, even for a visit.

That can be hard to define. If the guy pays up in full before leaving, I think they would welcome him back.

So suppose employee Saverin comes back to FB HQ a couple times a year for board meetings, can the IRS & California tax him on earned income? They do this to football players when they go on the road for games.

If so, it might make sense for S. to videoconference from Singapore.

He is not allowed in the US if he gave up his citizenship primarily for tax purposes.

FEI (For Everyone's Information)

Taxation
The United States is the only major country which taxes based on citizenship rather than residency. A 1995 study by the U.S. Congress found that at the time only the U.S., the Philippines, and Eritrea tax based on citizenship rather than residency. The Philippines switched to a residency-based system in 1997, thereby not taxing its citizens on worldwide income.[18]
In 1996, the U.S. changed its immigration law to include a provision to "name and shame" renunciants.[19] The Department of the Treasury became obligated to publish quarterly in the Federal Register the names of those citizens who renounce their citizenship. Only the names are published, but by counting the number of names in each list, media organizations are able to infer the number of renunciants each quarter. The 1996 law included a provision to bar entry to any individual "who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States."[19] There is no known case of this provision, known as the Reed Amendment, having ever been enforced.
In 2008, Congress enacted the Heroes Earnings Assistance and Relief Act that imposes a penalty—an "exit tax" or expatriation tax—on certain people who give up their U.S. citizenship or long-term permanent residence.[20] Effective June 2008, U.S. citizens who renounce their citizenship are subject under certain circumstances to an expatriation tax, which is meant to extract from the expatriate taxes that would have been paid had he remained a citizen: all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date, which usually results in a capital gain, which is taxable income[21] Eduardo Saverin, a Brazilian-born co-founder of Facebook, renounced his U.S. citizenship just before the company's expected initial public offering; the timing prompted media speculation that the act was motivated by potential U.S. tax obligations.[15]

http://en.wikipedia.org/wiki/Renunciati ... itizenship

I think Shummer's proposal is to make this "return" provision more "airtight."

If you want jobs, elect a Democrat