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More and more countries are implementing an "exit tax" when wealthy people try to give up their citizenship. Also, the US authorities make it increasingly hard

by Hermel 2y ago

More and more countries are implementing an "exit tax" when wealthy people try to give up their citizenship. Also, the US authorities make it increasingly hard to do so. I wouldn't recommend anyone to become a US citizen. Once you are in, it is very costly to get out again.

repomies69 2y ago
US is likely the only jurisdiction that can actually enforce it. Other countries can't just call US government to send them back if they suspect they owe some tax.
- jajko 2y ago
  Maybe, but you maybe want to travel. Even going back. Too bad if it would end up in 5 years jail time for some tax evasion or similar
- trimethylpurine 2y ago
  >Other countries can't just call US government to send them Tax fraud is fraud. The US definitely extradites for fraud. * Gaston Bastiaens * Stein Bagger * John Kirk
jimbob45 2y ago
Why not just maintain dual citizenship instead of needlessly renouncing?
- notagoodidea 2y ago
  Some countries don’t allow dual citizenships like the Netherlands and others allow it like Belgium.
- lIl-IIIl 2y ago
  Because US citizens have an IRS filing requirement even when living abroad. It is a very uncommon requirement among countries.
  - felsokning 2y ago
    Some foreign banks simply don't _want_ to deal with American citizens, precisely because of the reporting requirements strong-armed in agreements with the US -- because they have to report those bank accounts back to the states every year (or quarter). It's not like the US is funding that foreign work to be done on their behalf, either. So the reticence to even bother with creating bank accounts for American citizens makes sense.
tromp 2y ago
As a Dutch citizen, I can leave the Netherlands to live elsewhere and no longer have to file Dutch taxes. US citizens have an IRS filing requirement even when living abroad. What other countries behave like the US in this regard?
- blackhawkC17 2y ago
  Eritrea, an African dictatorship. But they charge a measly 2% and people don’t bother paying if they have no plans of visiting Eritrea again.
- chrisdbanks 2y ago
  Even Germany which is an EU member has an exit tax when moving to another EU country. This is theoretically against the EU's principle of free movement of capital. According to EU law, any restrictions on the movement of capital or payments—either within the EU or between EU and non-EU countries—are generally prohibited. However, somehow Germany gets away with it.
  - TomK32 2y ago
    It's not only Germany but also Austria and France (until 2004?). The Germany Wegzugsbesteuerung is meant to prevent cases where Germans leave the country for more than seven (or twelve upon request) years, e.g. to Switzerland, sell their Germany company stock and profit from paying a much lower tax or none like in Switzerland. Steuerflucht, tax evasion is prevented with this and there are certainly many who'd other move abroad, sell without taxation and move back again. There a plenty of exceptions though with countries Germany has a Doppelbesteuerungsabkommen (double taxation treaty) with to prevent cases where the individual would have to pay taxes in both countries. Personally I never heard of this tax before, despite being a German living in Austria, but then: The tax targets wealthy individuals with company holdings trying to evade taxation. https://de.wikipedia.org/wiki/Wegzugsbesteuerung https://de.wikipedia.org/wiki/Wegzugsbesteuerung
  - Atropos 2y ago
    It is a bit different though, because the German exit tax applies to companies and people holding more than a 1% share in a company. So no exit tax if you hold bitcoins as part of your private assets... Agreed that there is some tension with EU principles, but it is difficult to get it right. Building a company in country A for 20 years, then moving to country B for 184 days to sell it completely without paying taxes also does not seem like a fair system.
throwgh 2y ago
Many billionaires who move to USA, UK, Canada and Australia are corrupt/oligarchs/tax Dodgers. They are ok even to loose 50% of their wealth to get protection
scotty79 2y ago
Would it be really silly to just get rid of US citizenship as soon as possible? You can live and work in US without citizenship, right? Which citizenship would be good to get instead of US?
deleted 2y ago
[deleted]

by Hermel 2y ago

repomies69 2y ago

US is likely the only jurisdiction that can actually enforce it. Other countries can't just call US government to send them back if they suspect they owe some tax.

jajko 2y ago
Maybe, but you maybe want to travel. Even going back. Too bad if it would end up in 5 years jail time for some tax evasion or similar
trimethylpurine 2y ago
>Other countries can't just call US government to send them Tax fraud is fraud. The US definitely extradites for fraud. * Gaston Bastiaens * Stein Bagger * John Kirk

jimbob45 2y ago

Why not just maintain dual citizenship instead of needlessly renouncing?

notagoodidea 2y ago
Some countries don’t allow dual citizenships like the Netherlands and others allow it like Belgium.
lIl-IIIl 2y ago
Because US citizens have an IRS filing requirement even when living abroad. It is a very uncommon requirement among countries.
- felsokning 2y ago
  Some foreign banks simply don't _want_ to deal with American citizens, precisely because of the reporting requirements strong-armed in agreements with the US -- because they have to report those bank accounts back to the states every year (or quarter). It's not like the US is funding that foreign work to be done on their behalf, either. So the reticence to even bother with creating bank accounts for American citizens makes sense.

tromp 2y ago

As a Dutch citizen, I can leave the Netherlands to live elsewhere and no longer have to file Dutch taxes. US citizens have an IRS filing requirement even when living abroad. What other countries behave like the US in this regard?

blackhawkC17 2y ago
Eritrea, an African dictatorship. But they charge a measly 2% and people don’t bother paying if they have no plans of visiting Eritrea again.
chrisdbanks 2y ago
Even Germany which is an EU member has an exit tax when moving to another EU country. This is theoretically against the EU's principle of free movement of capital. According to EU law, any restrictions on the movement of capital or payments—either within the EU or between EU and non-EU countries—are generally prohibited. However, somehow Germany gets away with it.
- TomK32 2y ago
  It's not only Germany but also Austria and France (until 2004?). The Germany Wegzugsbesteuerung is meant to prevent cases where Germans leave the country for more than seven (or twelve upon request) years, e.g. to Switzerland, sell their Germany company stock and profit from paying a much lower tax or none like in Switzerland. Steuerflucht, tax evasion is prevented with this and there are certainly many who'd other move abroad, sell without taxation and move back again. There a plenty of exceptions though with countries Germany has a Doppelbesteuerungsabkommen (double taxation treaty) with to prevent cases where the individual would have to pay taxes in both countries. Personally I never heard of this tax before, despite being a German living in Austria, but then: The tax targets wealthy individuals with company holdings trying to evade taxation. https://de.wikipedia.org/wiki/Wegzugsbesteuerung https://de.wikipedia.org/wiki/Wegzugsbesteuerung
- Atropos 2y ago
  It is a bit different though, because the German exit tax applies to companies and people holding more than a 1% share in a company. So no exit tax if you hold bitcoins as part of your private assets... Agreed that there is some tension with EU principles, but it is difficult to get it right. Building a company in country A for 20 years, then moving to country B for 184 days to sell it completely without paying taxes also does not seem like a fair system.

throwgh 2y ago

Many billionaires who move to USA, UK, Canada and Australia are corrupt/oligarchs/tax Dodgers. They are ok even to loose 50% of their wealth to get protection

scotty79 2y ago

Would it be really silly to just get rid of US citizenship as soon as possible? You can live and work in US without citizenship, right? Which citizenship would be good to get instead of US?

deleted 2y ago

[deleted]