Your best friend is suing you for $600 million, and will soon go into tax exile in Singapore.
May 14, 2012 12:17 PM Subscribe
posted by Cash4Lead (299 comments total)
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Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship
ahead of the company's IPO so as to avoid paying capital gains taxes on his shares, which could be worth as much as $3.84 billion.
Saverin, born in Brazil and now a resident of Singapore, made the decision back in September of 2011. While he will pay an "exit tax" on his investments upon leaving the U.S., it is expected to be far less than what he would pay once Facebook's shares go public. In addition, by renouncing his citizenship now, Saverin avoids having to contend with the Foreign Account Tax Compliance Act, which combats tax evasion by U.S. nationals overseas, and which goes into effect in 2013. Saverin is among nearly 1,800 Americans who renounced citizenship last year, compared with just over 200 in 2008.
Writing in favor of Saverin's decision, Doug Bandow in Forbes says
the complexity and onerousness of the U.S. tax and regulatory regime make tax flight by the wealthiest Americans more likely. Writing against, Farhad Manjoo in PandoDaily argues
that Saverin owes his wealth to the U.S. government's support for education and the Internet, as well as to the comparatively clean and transparent U.S. court system that enabled him to sue Facebook founder and CEO Mark Zuckerberg for his share of the company in the first place.