Blogs & Discussions


Facebook Co founder Gives Up U.S. Citizenship before Company Goes Public

Eduardo Saverin, the billionaire co founder of Facebook Inc., has renounced his U.S. citizenship. The move, which is almost certainly compelled by the company's upcoming initial public offering (IPO), places Saverin among a growing number of Americans who give up their passports each year, says Bloomberg.

In Saverin's case, giving up his citizenship is a sensible solution to a substantial tax liability.

Because he already resides in Singapore and operates most of his current enterprises out of that country, Saverin will not want for a national home.
Furthermore, Facebook's upcoming IPO, which values the social network at as much as $96 billion, will yield Saverin an enormous sum for his 4 percent stake in the company.
By taking this action, Saverin will be able to substantially reduce his tax burden.

This is not to say that Saverin will avoid taxes entirely on his assets: Americans giving up their citizenship must pay an exit tax that essentially treats capital gains as if they are sold right then. However, by paying this tax before the IPO, Saverin will grant his financial advisers greater flexibility in valuing his assets and assessing his total tax burden.

In following this course of action, Saverin has become only the latest entrant into a pool of Americans all bent on reducing their tax outlays. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records.
A partial explanation for this increase is that income tax rates for top U.S. earners will rise to 39.6 percent from 35 percent next year.
Furthermore, rates on capital gains and dividends also are scheduled to rise.

This strategy of renunciation, though seemingly extreme, has also been compelled by action on the part of the federal government. The Foreign Account Tax Compliance Act, known as FACTA, seeks to track gains made by Americans' assets abroad so that they can be taxed. Facing such limitations on traditional forms of tax evasion, these Americans elect instead to give up their citizenship entirely.

Source: Danielle Kucera, Sanat Vallikappen and Christine Harper, "Facebook Co-Founder Saverin Gives Up U.S. Citizenship before IPO," Bloomberg, May 11, 2012.

For text:

Email me when people comment –

You need to be a member of Patriot Action Network to add comments!

Today's News

Latest Network Activity

MOTUS posted a discussion it’s the Michael Moore edition. I found this over on Gerard’s site, a good place to spend some time defusing your pre-election angst.It’s Michael…
4 minutes ago
MOTUS posted a discussion
Disturbing isn’t it? Soros owned voting machines capable of fraud in 16 states, Soros funded dirty tricks  committing voter fraud, with direct ties to the Clinton campaign. Remember when people used to be outraged over such things? Didn’t “dirty tri…
23 hours ago
MOTUS posted a discussion
Oh dear! About that high-level email hackery that Hillary - and every talking head with a “Democrat analyst” after their name - have been blaming on the Russians? Apparently John Podesta committed his own “high level hack” by falling for the oldest…
MOTUS posted a discussion
If the Cubbies can shake off a 71 year old curse and an onslaught of naysayers to win the National League pennant to advance to the World Series than Donald J Trump can win the presidency!Sure, the real battle is still ahead for both of them, butt a…
MOTUS posted a discussion
 I’d like to file another anecdotal pre-election enthusiasm report from fly-over America. Yesterday Raj and I took a mini color tour on the backroads of the mitten state. To be fair I should point out that we steered clear of urban areas and stuck t…
MOTUS posted a discussion
The Alfred E. Smith Memorial Foundation Dinner is normally a genteel gathering of the New York elite; political adversaries roast each other in good humor to raise money for a Catholic children’s charity. This year however they got Trumped. There wa…
MOTUS posted a discussion
It’s late and I know many of you get up early. So this isn’t a post-debait wrap up (srdem65 promised to do that for us, if her head didn’t explode while watching) just an early morning open thread with a few random observations:Wrap up from the Fox…
Oct 20
MOTUS posted a discussion
I must interrupt the presidential election process to bring you this important reflection on the Obama’s last, historic State Dinner; this one for the Italian prime minister Matteo Renzi and his wife, Agnese Landini. So naturally we wore Italian (Ve…
Oct 19

PAN on Facebook