Facebook co-founder renounces US citizenship pre-IPO Eduardo Saverin, a co-founder of Facebook, has abandoned his American citizenship ahead of the social networking company's possibly oversubscribed IPO in May. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” his spokesman Tom Goodman …
You can still visit the US or even live there, just depends of the country you have got citizenship from. So if you had some German ancestry, you could drop your US citizenship, get a German passport then visit the US when ever you wanted without a visa.
Smart move by this guy as the US taxes it citizens on their global earnings regardless of where they live. So he would have to pay income tax to Singapore and then another 75% extra to the US.
"Smart move by this guy as the US taxes it citizens on their global earnings regardless of where they live. So he would have to pay income tax to Singapore and then another 75% extra to the US."
Not quite totally true.... The way it works on foreign investments is that you have to pay the US the difference in tax. Which can work both ways:
1. If you pay **less** tax in the foreign country you owe the difference. Assume a capital gains tax of 10%. If the other countries tax is say 8% you owe the US a 2% tax.
2. If you pay **more** tax in the foreign country, in certain circumstances you can take a tax credit. So again likewise 10% US and 12% foreign can sometimes get you a credit but it isnt 2% (bastards).
I dont fully understand it but my accountant does. But it certainly works out that you only ever pay the total of the higher tax rates and then not always that :)
Depends on the tax treaty between the US and other country. In some countries you will get double taxed. The original article said that Singapore has no capital gains, therefore he will pay 0% tax on his IPO earnings, unlike if he was US tax resident/citizen/gc holder where he'd pay (I believe) federal qualified dividend rate of 15%
PS: This is capital gains, not income as the GP stated.
> I get hounded by the tax man for a £5 under payment and these
> people just go an avoid it, and it is legal.
"Just" going and avoiding it has involved relocating to Singapore. How far would you be prepared to move in order to avoid that "hounding" that you're suffering? You are free to move too, if you think the benefit is worth it.
JUST PAY UP!
Scummy low lives avoid paying their way. So I pick up the tab??
There are Jeremy Kyle "guests" everywhere, no matter which country or class.
Just stop relying on 'me' to pay for public services, you Greedy Bastards!
WOW indeed, the parents did a very good job in dragging up its offspring to have no value in society, family, duty, respect, honour. Honestly, lower than a snakes todger!
Selfish, greedy, manipulative, useless twats.
@AC and They said WHAT? - If you have shitloads of money, more than you can ever sensibly spend in several lifetimes, why WOULDN'T you pay whatever tax they put on it? (If I recall, Peter Gabriel - living in the UK - once said this about Phil Collins - fucked off to Switzerland) I have never resented paying tax - it is part of being a part of the community I live in. If was lucky enough to have more than enough to live on for the rest of my life I might move somewhere else in the world, but I'd pay my taxes here and wherever I set up home.
I am being completely honest here - no attempt at humour. I have never understood why people think it is such a hardship to pay taxes that keep society running.
It's astonishing to see such absurd levels of greed. The US already has an insanely low tax rate and yet he is willing to abandon his citizenship in order to save himself a bit of money? It doesn't matter whether he saves himself $10m or a $100m, the reality is that he if he simply paid the tax he ought to he'd still be worth hundreds of millions of dollars and would never have to worry about money again for the rest of his life.
The problem with capitalism is that it's not about what you have; it's about what other people have. It seems astounding that politicians have convinced people that those at the bottom are abusing the system and should have their benefits and safety nets removed, whereas rich people should be taxed less because they're "job creators". Same with Mr Osborne - is it really appropriate to lower the top rate of tax at the same time that pensions are being slashed, hundreds of thousands are losing their jobs and millions are being given pay freezes? No doubt there is need for reform but it sends out the wrong message when the only people being asked to pay for austerity are those that can least afford it.
Well, yes actually, they are job creators, this guy especially. At the end of the day he contributed time and his own money at a very risky and uncertain time for a business which now employs 1000+ people and will continue to employ more into the future.
Where would you rather these jobs be created? Seeing as an internet based business can be created or moved to anywhere in the world, if the rates are not right in the current country the company moves and the key staff move with them. A country has to keep the rates for the rich sensible and at least comparative to other countries otherwise the people who own companies, especially less established ones, will simply leave and take the jobs with them.
Yes, the less well paid will be able to sit there and say the rich are taxed a lot more than them, but will they be happy saying that without a job?
"Well, yes actually, they are job creators, this guy especially. At the end of the day he contributed time and his own money at a very risky and uncertain time for a business which now employs 1000+ people and will continue to employ more into the future."
Facebook was built on the back of starting out in a country with very high internet access. If he'd started the business in Brazil he'd have been made nothing. This strikes me as just ungrateful: he built his business on the basis of being a citizen of the Land of the Free and abandoned it the instant it suggested he pay for the privilege.
Why ungrateful? Others will still be in the USA. Others will pay a tax.
(Note in advance: I think my arguments/position can be seen as wishy-washy, maybe equivocating...)
And, let's be honest. There are many entrepreneurial types who create something that doesn't have much of a government "thank us" foot print, other than national security and local police, firefighting and similar. If someone toils in the night, is not a criminal, and sources knowledge from the very same sources available to anyone with ambition, then a government is greedy to impose a HUGE tax or one that is more than a few percentage points. It's a cash land-grab.
And, anyone creating a land-free business should be able to travel and work or toil on his or her own hobby, tax exempt, and if it produces occasional income but nothing stable or sustainable, it should be exempt from taxes so long as the toiler keeps meticulous, honest, furnished records for tax exemption qualification purposes. If a person travels to another land and is taxable there, then ONLY that land should receive the taxes until the toiler sets foot back home -- ESPECIALLY if back "home" there is no corporation, sole proprietorship, or other business entity type functioning or registered and owing local, unpaid taxes.
I realize that the USA may have the lowest taxes of industrial/advanced countries, but that is no excuse to tax citizens worldwide. I also understand that if a person is aware of his or her travel plans to be out of the USA for the minimum qualified tax-exemption period, he or she need only declare (in writing?) to the IRS that he or she will be OUTUS and is requesting formal exemption from the taxes. I realize, too, that a person who chooses to allow him/herself to be subject to USA globe-spanning taxes, he/she might find an enjoyable, lower tax option.
However, moving is not a small choice. It could be for a number of reasons, and affinity is likely one of them. If one is not actively using the embassy, consulate, or other resources available to qualified/verified citizens, and one is abroad and interacting extensively with a new local community, that community may be what the person wants to support. Forking over money to back home just deprives that individual of what he or she otherwise to CHOOSE to commit locally.
Don't mistake me: I'm not making a "down with the USA" statement. I'm talking about what is emotionally irritating to some: being forced to renounce or keep paying -- unless playing dangerous games hopping around the globe and avoiding stepping foot in the USA or suddenly being taxed much much higher than in certain countries where the tax may be zero or astoundingly puny. To me, taxes I pay are for MY existence/footprint and the time I was THERE, not the future. Of course, it is a difficult position to take when some of us have had the government (federal and state) safety nets keep us out of the gutter. OTOH, there those who will insist that that social safety net was paid for by taxes one already forfeited from payroll and services and sales taxes. But, even then, there are times when plenty of people have taken out of the system more than they put in, and until they have effectively "restored the balance from imbalance", it is a dangerous or precarious argument unless careful accounting was done to at least nullify the $$$$ portion of the argument.
Sadly, an individual can figure out how to build or buy a self-supporting dome home for living on the Moon, or Pluto, and eventually, governments will change the word "Global Taxation" to "Solar System Taxation", even if said governments didn't explicitly play a role in the conveyance and protection of the individual. Of course, they could act like cement and breakers/demolition mobsters and pierce one's dome, and then say, "NOW you need our protection"....
Anyway, wealth and entrepreneurship MUST circulate, and MUST be free to move to and operate where they will reach their best potential from the entrepreneur's perspective. From the USA, we're free to move, and if we plan carefully, there is little the government can or will do to assert against some people. But, other countries will definitely actively seek to prevent "capital flight" (unless the right officials are paid off)...
Sigh...
"a very risky and uncertain time for a business". For the business, yes, for him not so much. He was a college student, spending his summer vacation on a startup, something that probably looks pretty good on the CV of a Harvard graduate. And I wonder how much of a dent $1000 made in his net worth at that point.
Having said that, I wish him the best. If the job creation he's investing in involves Singaporean sommeliers, well, that's his choice. America was at no expense for his birth and upbringing, was it?
Your post describes one of the biggest problems with Globalization, i.e. citizens and companies benefiting from the infrastructure, education, laws and sales made in country 'A' -usually a 1st World country- and paying their taxes to country 'B', usually the lowest bidder. The fact that many of these 'B countries' are -more or less well disguised- dictatorships*, where most of the taxes paid by people like Mr. Saverin are used to line the pockets of the elites, while the common citizens have a low living standard, and little chance to improve it.
The process above described implies that the conditions at 'Country A' will worsen, as their lower tax income prevents them from adequately maintaining their Health, Educative and Judiciary Systems and their infrastructure, while at the same time the middle classes -the biggest consumers- vanish.
Does this state of things sound familiar?
IMHO Mr. Savarin is a parasite, and the guys that wrote and approved the laws he uses to cheat the rest of mankind are also parasites.
(Steam pressure going down - Mission accomplished ;-)
Note*: there are several exceptions to this, like Switzerland, but they have been in this business for centuries.
Because I have no idea what you are on about?
Facebook increasing bandwidth?
There's value it that?
No we have to constantly battle with employees to get on with what they are doing eventhough we allow access during breaks and lunch. For some that is not enough, checking phones every two minutes, answering messages, having conversations during work hours etc etc.
The problem with Facebook is that it artificially instills in people that their personal lives are sooo important that it takes.preference over everything else. They then suffer withdrawal symptoms if they can't get a fix, when in fact their lives are just mundane.
It's certainly debatable to what extent they are net job creators, as it is with a great many businesses.
Without Facebook, a great many people who turned out in this version of reality to be FB users would presumably be using other social networking sites, which would also be employing people.
.....through their work, on very ordinary salaries with no possibility creative tax planning, to ensuring that our society functions. Without their contribution we wouldn't have any kind of functioning society at all. They (many millions of them) are every bit as important to us all as people like this chap. The difference is that they are, like me an thee, ordinary folk without the overweening sense of entitlement that so many members of the 1% elite seem to have.
This post has been deleted by its author
> his own money at a very risky and uncertain time
A whole 1,000USD of it - he probably drinks that much in a single night now
> a business which now employs 1000+ people and will continue to employ more into the future
Not to mention all the people gainfully employed due to the inefficiency created by other people using FB at work
"A country has to keep the rates for the rich sensible and at least comparative to other countries otherwise the people who own companies, especially less established ones, will simply leave and take the jobs with them."
I am so sick of hearing the same old argument.
One point you’re talking THROUGH YOUR ASS!
Go, fuck off and take your jobs, but don’t expect to sell or trade your goods in Britain! The HUGE profits earned from British consumers will be closed to you and YOUR COMPETITORS will HAPPILY comply and take the £100MILLIONS off you! Eventually make you bankrupt! So go and don't come back you greedy low live (tory) Jeremy Kyle "guest".
No one has the bollox to tell them where to stick it! If they want the £100Millions, then they play by our rules.
From my reading of this article, this guy has been in Singapore since 2009. If you're abroad for something along the lines of more than 340 days in a year you don't pay income tax anyway - the only issue here is capital gains tax which applies if you are abroad or not. So I'm not sure why you're even talking about income tax rates.
Also, given that this guy was from Brazil and has lived in Singapore for the last few years I can understand the decision. $100M to change citizenship from a country you only lived in for let's say 12 years... I'm not sure I'd characterize that as astounding levels of greed. Sounds more like prudent behavior given that he doesn't live here anymore anyway. Keep in mind that his money, technically speaking, has not been made yet - not until that IPO...
As a Yank living overseas, I have to correct your '340 days' assertion. I spend zero days per year in the USA but still have to file a 1040 every June and pay tax on my global income regardless of source. There is a generous exclusion of US$90k or so per year, but everything over that is taxable by the USA as well as the country(ies) in which its actually earned. Salary, interest, dividends, and capital gains.
We also have to supply details of all bank accounts and their balances, even if we spend zero days per year in the USA. Land of the Free!
Sounds like Denmark, except Denmark don't have the 90K basline, and their tax office has no respect whatsoever for double taxation agreements.
Tax on my foreign investment income last year, incl. companies tax in the registered country and danish income tax = 87%. i.e. My company showed a profit of $1 and I got to keep 13 cents.
IIRC Australia has global taxation.
In fact, most of the western world probably has it.
Anon. Obviously
"Abroad for more than 340 days..." Not true - the US is almost alone in taxing its citizens if they don't live in the country regardless of how long they've been away.
What do non-resident taxpayers get for all this tax? Apart from loads of expense, tax and hassle? they don't get to benefit walking the safe streets of the US... I guess the US will send the black helicopters to go rescue you from terrorists/kidnappers compared to, say, the UK who will do fuck all.
The US (or anywhere else for that matter) isn't such a great place that I'd give them a few extra millions if I didn't have to - like if I didn't live there and had no plan to go back. It's not like he gets to make the tax rules anyway.
Here in the UK I'd do the same thing. The openly corrupt and self-serving UK government does extremely little to merit a tithe on my success.
I'd chuck UK citizenship away in a heartbeat if I could afford to move elsewhere, though it might be more financially expedient to just buy myself a member of the cabinet and maybe pay them 100th of the tax into a personal bank account to have the bill waived.
" If you're abroad for something along the lines of more than 340 days in a year you don't pay income tax anyway ..."
A US passport carrier always pays US taxes. Income and CG. You only can avoid state tax since you are not resident but if you maintain a property in some states you pay state tax too.
An expat
The number of nights in the country is something like 60 allowed per year for UK plus other evidence concerning domicile and residence. But, though some commenters seem to. be confused about which country they inhabit, GB is not part of the USA and has a completely different legal and tax system. According to all my American friends, quite a few where I live in continental Europe, they have to complete tax returns every year and pay if required, no matter if they never even set foot in the USA, for ever. In addition, since the latest Swiss problems with USA demands, most banks here will no longer conduct business with them. By the way, the total USA tax level is not that benign and the state gives precious little back for it, depending on which state.
Also, Tax Evasion is illegal. Tax Avoidance is legal, being simply the using of permittied allowances and devices to reduce one's tax assessment
Actually, the problem with Socialism is it has been given a bad rep by those corrupt leaders who tried to impose it on their people.
It's been a victim of a major assault of FUD by those who stand to loose everything (the Rich and Powerful) if it was ever implemented properly, and the every-person as a result of that assault seem to think socialism and communism are the same thing.
"Actually, the problem with Socialism is it has been given a bad rep by those corrupt leaders who tried to impose it on their people."
Really? How else do you get Socialism but by imposing it on the people? What, do you want to be socialist on your own? How would you "redistribute" other people's money if it's only your money that you control?
And also, "corrupt leaders"? What other kind of leaders are there? When are people going to stop believing in cuckoo land and get it that utopian dreams are utopian (and dreams, actually)? At least capitalism (or free market or whatever other variation we seem to be having these days) accepts some (or plenty) people will be greedy and tries to work with it. Of course it's not perfect, but it is realistic at least. Oh, and it doesn't take away freedom in the name of some childish BS fantasy and "greater good" or whatever way you want to call it. If you don't like being an adult, dealing with reality, taking responsibility for your actions and choices and standing on your own two feet - you can always stay home with mummy and daddy - that's perfectly fine - but don't ram your life style choices down the rest of our throats.
"... it has been given a bad rep by those corrupt leaders who tried to impose it on their people."
No, actually it has been given a bad rep because it must be imposed on the people and there are always some who will oppose that, or any, imposition on lifestyle choice as a matter of principle.
"It's been a victim of a major assault of FUD by those who stand to loose[sic] everything (the Rich and Powerful) if it was ever implemented properly..."
I'd like to understand this clearly, proper implementation means some will lose everything. You are of course aware that statement by itself certainly eliminates doubt and ensures fear of anything close to either socialism or communism.
Oh sorry, were you being ironic?
What a load of ole shite!
I don’t care what you have, as long as it's earned honestly and you’re not going to dodge your commitments.
If you've worked hard and earned millions, good for you. I'd be the first to say that it's deserved.
But that doesn't mean you them go on to avoid paying your way. Like it or not, if you earn more, you pay more!
Your ignorance is astonishing. What has capitalism got to be with taxation? Oh that's right, nothing.
"The problem with capitalism is that it's not about what you have; it's about what other people have", nope thats socialism, socialists are always talking about how they should/will spend other peoples money.
This post has been deleted by its author
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
