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Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO
parallel_prankster writes "Bloomberg reports that Eduardo Saverin, the billionaire co- founder of Facebook, has renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill. From the article: 'Facebook plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company. Saverin's stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. Saverin won't escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don't sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan's law school. For tax purposes, the IRS treats the stock as if it has been sold.'"
Just to provide a little bit more information to this story, here are the requirements for citizenship in Singapore: http://www.ica.gov.sg/page.aspx?pageid=132
-- (this is a sig) My Computer Programming Forumhttp://www.programers.co.nr/
You don't see real American rich people renouncing citizenship.
Actually, the number was way up in 2011. A total of 1,780. It may not seem like a lot, but in 2008 it was 235.
http://www.bloomberg.com/news/2012-05-01/wealthy-americans-queue-to-give-up-passports-in-swiss-capital.html
Learning HOW to think is more important than learning WHAT to think.
According to http://en.wikipedia.org/wiki/Eduardo_Saverin he's lived in Singapore since 2010. That makes it two years, and now he's renouncing his US citizenship. Coincidence? You decide! ;)
Ah yes, those evil Koch brothers. We need to get rid of those good for nothing bastards as soon as possible. Just look at the stuff they've done!
From Wikipedia:
He is a major patron of the arts and had contributed to several charities, including Lincoln Center, Sloan Kettering, a fertility clinic at New York-Presbyterian Hospital and the American Museum of Natural History's David H. Koch Dinosaur Wing.[8] The New York State Theater at Lincoln Center, home of the New York City Opera and New York City Ballet was renamed the David H. Koch Theater in 2008 following a gift of 100 million dollars for the renovation of the theater. Condé Nast Portfolio described him as "one of the most generous but low-key philanthropists in America" ...
Koch contributed $7 million to the Public Broadcasting Service (PBS) show Nova,[30] and is a contributor to the Smithsonian Institution in Washington, D.C., including a $20 million gift to the American Museum of Natural History, creating the David H. Koch Dinosaur Wing and a contribution of $15 million to the National Museum of Natural History to create the new David H. Koch Hall of Human Origins, which opened on the museum's 100th anniversary of its location on the National Mall on March 17, 2010.[31] In 2012, Koch contributed US&35 million to the Smithsonian to build a new dinosaur exhibition hall at the National Museum of Natural History.
Guess you need to stop watching Nova. Hope you don't plan on visiting any museums or taking in a show in NY.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
Maybe there is a real reason.
He was born in Brazil and lived there until he was 9. He has not lived in the US since 2010. He renounced his citizenship in September 2011 long before the IPO was announced, although I am sure he knew the direction.
He is still a Brazillian citizen. If he has to pay US taxes based upon his citizenship wouldn't he also need to pay Brazillian taxes based upon his citizenship as well?
The US makes it very easy to keep a US citizenship. To renounce it you have to do so in front of a US consular officer, and with the full intent of renouncing your citizenship. Any other way isn't valid. So if another country as part of their immigration process say "Give us your passport and say you renounce your US citizenship," you can do so and it doesn't matter. You can go to the US embassy and get a new passport later. The US doesn't consider their ceremony valid, they consider you still a citizen. Of course when it comes to US citizenship, the only opinion that matters is that of the US.
Also other than taxes, there aren't really any burdens of staying a US citizen. They don't require you to show up twice a year to praise the president or something. You can have the citizenship and it is just something you have. Taxes also aren't a problem, if you aren't trying to get out of them. If you live in another country, work there, and pay taxes there, you are fine. The US is a-ok with that, they don't want a cut.
They only go after taxes when people are clearly trying to dodge taxes that they'd otherwise owe. They don't want rich people to make a ton of money in the US but technically live in Barbados and not pay any taxes.
So really the only reason to formally and actually renounce a Us citizenship are:
1) If a country you are immigrating to actually makes you do it properly, to a US council. Of course even then who knows because that would be done in the presence of the US council and they might decide it was bullshit since you were forced.
2) If you really dislike the US so much that as a statement or personal moral matter you just can't keep your citizenship. Fair enough, but of course then you'd better be sure.
3) To evade taxes. In that case, fuck you.
Otherwise, people keep it. My parents moved to Canada like 5 years ago. Mom is from there, so Canadian of course, but got her US citizenship when she lived here. Dad was born in the US, and recently got his citizenship up in Canada. Neither renounced their US citizenship and neither are going to. Why would they? Nor a I renouncing my Canadian citizenship, though I live in the US. I can keep both and it is no big deal.
Whereas today, 3% net. Or, if you are GE, zero net, plus billions back. What's your point again?
Contrary to popular belief, there is no death tax. It's an inheritance tax. With proper estate planning, if you give all of your assets when you die to a charitable trust instead of trying to give it to your heirs, there is essentially no tax to you (you are dead) and the charity gets the full benefit of your estate. There is effectively only a tax to give the money to someone who generally would owe income tax (say like your kids who are still alive or a company). Of course when you are alive, and you give a substantial amount of money (above the gift limit) to someone who owes tax they have to pay tax on that windfall (although the income tax rate they would pay would generally be lower than the 55% estate tax rate).
One rationale of an estate tax is to effectively "withhold" the taxes from the deceased (kinda like how a casino or lottery needs to withhold taxes from prizes even though technically they would otherwize be able to give all the money to the receipent as the recipent owes the taxes, not the payer of the prize), the government knows that the recipient may spend all the money and then not be able to pay the taxes and they can't get blood (taxes) out of a (broke) turnip...
The other rationale of estate tax is to prevent the creation of dynasties of wealth like royalty that never have to work.
Probably not, unless Brazil is as fucked up as the US with regards to taxing non-domiciled citizens. Ironic and hypocritical concerning the how the country came about.