Will save him a few hundred mil.
Okay. So? Good for him?
I think anyone who renounces their citizenship should be banned from entering the US ever again.
People have fought and died for this country, and continue to do so. If someone worth billions would sell it out for a few extra percent return on investment, good riddance. Don’t let the door hit you in the butt on the way out.
Personally, I think this is a way stupid idea. The guy’s gonna get more money than any reasonable person would know what to do with. So, to save a fraction of that, he is going to give up something that you CAN’T buy back at any price. Something that someday he may very well wish he could have. Yeah, he may never need that citizenship, but then again he may someday want or need it. Though I guess if push comes to shove he could don a sombrero and sneak back across our southern bourder.
The guy is a dick. Immigrates to the US, becomes a citizen, will become a billionaire, and tries to sneak into the Singapore tax haven. The US will still go after the tax that he probably “should” pay. I’m all for the gubmit doing so.
I don’t get the attitude. We have a great country that allows people to get rich. Paying their share of the current tax code is part of the deal.
No it won’t. What he’s doing is completely legal. Before the IPO his stock is worth 0, officially.
He was eleven.
What reason on earth would compel him to need or want US citizenship?
With his money he can get (ie buy his way into) citizenship in practically any nation on the planet and he can easily get a visa if he wants to visit. With his existing resources there is no compelling reason for him to be US citizen with respect to any lifestyle or utility reasons.
You used to. Between security harassment at airports, aging infrastructure and the US government seizing entire businesses before trial the US is not really a very business friendly place anymore.I run a small business, originally from Australia. The US is the last country I’d move to and gain citizenship and run a business in, many other countries are more entrepreneur friendly nowadays.
Sorry but there’s a price to pay for the absurd security theatre farce and other shenanigans that the US has been up to and I predict a lot more billionaires will vote with their feet as nothing is changing. As others said, he didn’t have a choice in being brought to the US, if he doesn’t want to live there and doesn’t agree with the politics, why should he keep his citizenship?
Well, he just said goodbye to his US social security benefits. That extra $2000 a month would go a long way toward buying brass polish for his fleet of yachts 40 years from now.
And he’ll never be able to rise above sergeant in the US Army. Who’s laughing now, Eduardo? Who’s laughing now?
He came to the US as a child and is not sneaking into Singapore. Singapore has great tax laws that attract wealthy and educated people and as a result, they have a strong economy and currency. The US compels people to leave with is overbearing tax laws. I know I would never keep all my money in the US… and I am American.
This is nothing new. Just looking at my country, Spain, we have:
-Internationally famous soprano Montserrat Caballé.
-Josep Carreras, tenor (one of the “three tenors”).
-Arantxa Sánchez-Vicario, tennis player.
-Her brother Javier Sánchez-Vicario, another tennis player.
-Sergi Bruguera, yet another tennis player.
-More pro golfers and bicycle racers than I care to list by name.
-… And more.
All of them have one thing in common: born in Spain, they are nowadays functionally from Andorra, to evade Spanish taxes.
Plenty of jet-setters in Europe end up “becoming” citizens/residents of Monaco for the same reason: low to non-existent taxes.
Julio Iglesias, the Spanish singer, did the same – only, instead of Andorra, he chose Panama.
And let us not forget the entire Spanish international soccer team, who arranged to have all their winnings from the Spanish victory in the 2008 European Soccer Cup stashed away in Austria, to evade Spanish taxes.
So, that the co-founder of Facebook has decided to renounce his US citizenship and reside in Singapore doesn’t seem to strange to me!
Singapore has no capital gains tax. He’s saving a lot more than a few extra percent.
Sure he can. As a billionaire with friends at Facebook he can pretty easily get permanent residence. A few years later he can apply for citizenship.
Not necessarily. In fact, in theory he can be barred from returning to the U.S. ever again in any status:
“In 1996, the U.S. changed its immigration law to include a provision to “name and shame” renunciants. 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.” There is no known case of this provision, known as the Reed Amendment, having ever been enforced.”
It wasn’t ME that said percent. I said fraction.
To be fair, he apparently moved to Singapore in 2010. So the move was likely not a direct effort to avoid taxes after a Facebook IPO.
Um, his stock, even before the IPO is worth far more than 0. You have been able to buy shares in Facebook for a while now. Besides, did you even read the article? He is still going to have to pay taxes.
So, he will still have to pay a good amount in taxes, and that amount shouldn’t be too far off from the normal tax burden since the secondary markets likely priced Facebook stock fairly close to what it will be priced at once the IPO happens. He might save a bundle in future capital gains if Facebook stock continues to appreciate.
The article is wrong on that.
Read Section 8.
Then consider that Facebook has a restrictive repurchase agreement setting a price of $0.01 per share. This restrictive agreement expires upon IPO.
where it really gets murky is not citizenship but residency. A lot of countries have a law that if you stay more than 90 days you are a resident and are supposed to pay personal income tax in that country if you earned any money while there.
But if you for example own a company or a massive stock portfolio or get royalties from intellectual property you could continuously travel spending less than 90 days in any one country so you are a resident nowhere. If you have citizenship in a country that does not tax your income earned while you are not a resident (which is most of them except the US) then effectively you don’t owe personal income tax anywhere.
Several years back I went and spoke to a “tax minimization” consultant company and yes apparently there are ultra wealthy people that do exactly what I have described. The final piece is just to have your company that owns whatever it is in a nation with no company tax, and it does period payments to you, viola no personal income tax, no company taxes.
Wouldn’t surprise me if he adopts this strategy.
The original article says the following:
So you are contending that the director of the international tax program at UM’s law schools is mistaken?
I read section 8. Please explain why you think this would apply? One reason it seemingly won’t is because Facebook doesn’t fit the definitions specified in the ruling:
Clearly, the IRS is not going to fall for this. Also consider the following:
Facebook is likely not a closely held corporation, lots of trading occurs in at least 2 different markets on regular intervals, and there is a known fair market value for their stock. The pdf you linked to also says the following:
Again, market quotations are available as is financial data. Second, the first the article said the tax that would apply was the exit tax which stems from the heart act of 2008. Here is what seems like a detailed explanation of how the tax works.
It also seems you may be able to gift a decent amount without taxation (I think 5mm).
Again, your argument makes no sense. Here is another article, that aligns with what I said earlier, that I am sure you disagree with.
Please explain how all these experts got it wrong? This isn’t People magazine here. I typically trust these various news outlets on matters like this (WSJ, Forbes, NYT, LAT, etc.).