Facebook co-founder Saverin renounces U.S. citizenship ahead of IPO

Facebook co-founder Eduardo Saverin.

/ Facebook

(CNET) Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship ahead of the company's IPO, a move likely calculated to help him dodge capital-gains taxes, Bloomberg reported.

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Saverin, one of a handful of people who helped Mark Zuckerberg start Facebook at Harvard in 2004, hasn't been active at the company for many years. He still holds an estimated four percent of Facebook

"Eduardo recently found it more practical to become a resident of Singapore, since he plans to live there for an indefinite period of time," Saverin spokesman Tom Goodman told Bloomberg by email.

Renouncing his U.S. citizenship could shield Saverin from much, though not all, of his U.S. tax liability related to his Facebook holdings. Singapore doesn't have a capital gains tax, although it does tax income earned in the city-state as well as some foreign-source income.

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According to Reuven Avi-Yonah, head of the international tax program at the University of Michigan, Americans who give up their citizenship still owe a sort of exit tax on the capital gains from their stock portfolios, whether they've sold shares or not. But estimating the value of shares in a private company such as Facebook is, shall we say, an exercise with lots of room for interpretation.

Avi-Yonah told Bloomberg that renouncing citizenship ahead of an IPO is "a very smart idea" from a tax standpoint, since once a company is public, "you can't fool around with the value."

Saverin gave up his U.S. citizenship "around September," his spokesman told Bloomberg. Facebook formally filed for its initial offering earlier this month. Saverin was born in Brazil, then moved to the U.S. in 1992 and became a citizen in 1998.

This article first appeared at CNET.

[nar6307]

This scum can go to hell or back to Brazil where he was going to be killed until the US gave him refuge. Now he owes the US Nothing! I am so sick of all you tax cheats not wanting to pay for the infrastructure that is provided for all. Where do you think this all came from? Santa Claus? The tooth fairy? People that have become rich in this country have done so by using the commons provided to do so. All you tax hating Libertarians go see how well you do in Somalia where there is no government to bother you !

[Superabound1]

So not only do unregulated Republican scumbag tax loopholes encourage businesses to export jobs, they encourage businessmen to export their own citizenship!

This man is a traitor, pure and simple.

Why not just go the full mile and let people buy and sell their American citizenships on the open market? Let me start the bidding on my own at a nice even $1,000,000

[1stlttightwad]

Share the wealth..You have more than enough..tax the rich..There is one fly in this ointment and this is an example..The "rich" can afford to leave and then you get NOTHING. Way to go Obammy.

[Vonzy]

Nothing shouts "I'll do anything for money" more the Facebook co-founder. Gree

[gramljon]

This man should be put on a terrorist watchlist and never allowed back in the U.S. for business or pleasure because it is actions like these that terrorize our economy and create our budget deficits. He has had us and now he is leaving us. Don't let him come back.

[hypnotoad72]

Mortar -

Not at all.

Facebook users give up a lot (and to say nothing of opt-in security updates).

Their company is a leech in every conceivable away. And see an article I cited elsewhere to someone in this thread as they do take a LOT of government handouts, which adds to our deficit. You don't like handouts, right?

[1stlttightwad]

Hey nadelio, listen you can hear Buffets screams. Oh you didn't know he was in a battle with the IRS about them taxing him too much.

[democracy8]

REAL patriots don't "jump ship".

[hypnotoad72]

Mortar -

Real patriots don't take welfare, either.

http://www.southernstudies.org/2012/02/facebooks-dubious-social-mission.html

The man is a leech, pure and simple.

Oh, did Ben Franklin say that bit, along with "a penny saved is a penny earned" before or after giving up his slaves in order to feel better about himself?

[jerryomara]

I work in London, the U.S. is the only country on earth thank makes us pay taxes twice once here and then we have to fill out U.S. Taxes. The waiting list here to give up citizenship is over two year I can not wait for my turn.

[hypnotoad72]

Maybe you both can provide articles to enlighten us all on your individual claims?

[JeffersonDarcy]

Estimated 7 million non-agricultural jobs are held by illegal aliens .
This is one of the reason why you, or your adult kids can't find a job.
Illegals are using fake, or stolen identity to hold jobs.
Urge your Members of Congress to support Mandatory E-verify legislation .
Google this: NUMBERSUSA .Once you are registered, go to the "action board" to
send free faxes to your state representative .
They are all typed up and ready to go, you just need to click your mouse to send.
No more illegal aliens in payroll jobs !

[hypnotoad72]

Worse,

http://www.lawyersandsettlements.com/case/hiring-illegal-immigrants.html

Illegals have been extorted with "low wages or ICE" and in turn the same low wages are given to people here legally.

The corporations will upend their own "law of supply and demand" by using illicit methods to lower the wages for the benefit of the top.

Shareholders, who put money into the system and demand more on it, are also leeches since their efforts devalue labor, which is what we earn by pickin' that lettuce.

Maybe McCain can try picking lettuce as well, since he supports the vulture side of this "supply side economics" paradigm...

http://www.washingtontimes.com/news/2008/jan/14/sen-mccain-and-illegal-immigration/

http://sensico.wordpress.com/2008/08/22/video-mccain-americans-wont-pick-lettuce-for-50hr/

It's never been able bestowing citizenship or anything else benevolent. It's about screwing EVERYONE over for selfish gain. What would Jesus say about that... ask fellow Christian, Rick Scott:

http://www.huffingtonpost.com/2011/05/27/florida-budget-rick-scott_n_867925.html

http://www.gofbw.com/news.asp?ID=11991

[RunsWithWolves]

That should be illegal. Period. This is the kind of stuff the rich do all the time to avoid taxes. It seems this guy would have to pay taxes on that money somewhere, if not the U.S. Most other countries have even higher taxes than the US.

[hypnotoad72]

Exactly.

Instead of King George 236 years ago, we now have a bucket full of King Georges...

[democracy8]

I'm not sure that it should be illegal, but it IS despicable.

[xpat123]

The US is the only government with "citizenship based" taxes other than Eritrea..but apparently the US doesn't approve of Eritrea taxation: http://isaacbrocksociety.com/2012/01/30/only-the-u-s-may-tax-its-citizens-living-abroad-u-s-condemms-use-of-disapora-tax-for-other-countries/.

Please keep in mind CORPORATIONS don't play by the same rules...money earned outside the US is exempt until it comes back into the US. US citizens are not so lucky.

Imagine you were born in Mexico.. but live, work, pay taxes in the US. Regardless, Mexico demands a tax return/pay tax every year.

Due to changing rules and forms, a US based tax attorney specialized in Mexican law is required ($$$). You must report all bank accounts/assets held in the US. Failure to comply risks your life savings.

Mexican politicians need $$$$, so demand US banks report the accounts of Mexicans living abroad. The US banks are upset because a) US law forbids this, b) expensive and c) US banks aren't Mexican tax collectors. US banks kick out Mexicans instead of reporting.

Your future is at risk due to citizenship in a country you no longer live in. You are happy in the US, and don't want to move back to Mexico.

The only way out is to renounce your Mexican citizenship.

What would you do?

Most of us renouncing aren't extremely rich... but Saverin paid his taxes while living in the US (plus school, housing, etc.). He financed Facebook with private, not public $$$. He is not "fleeing the country to avoid taxes". He lives in Singapore (for the last 2 years) and wants to avoid double taxation... why is this wrong?

The number of US citizens abroad expatriating will continue to rise.. the waiting list at my local US embassy is 2 years... the process is slow (deliberately) and expensive ($450 to renounce, plus exit tax if you are wealthy).

How quickly people forget that the US was founded by expats primarily to avoid taxation... it didn't take long to come full circle.

[hypnotoad72]

He has financed FB with his own money? And he and his company have never ever once taken even a cent from taxpayers or any other form of subsidy or entitlement perks?

At least I cited one source saying Facebook has been given a free ride. Why don't you cite some sources claiming how he did everything without government help.

[hypnotoad72]

Your telling of US history is grossly inadequate as well...

Our forefathers also left because they did not like the repressive conditions AND religious limitations. It's ironic that they then took slaves and then said things like "A penny saved is a penny earned"...

[hypnotoad72]

Oh, Facebook is a welfare queen as well:

http://www.southernstudies.org/2012/02/facebooks-dubious-social-mission.html

(I'm sure plenty of articles can be found where they take taxpayer-funded subsidy... taxes are too high here but that little kid has no qualms with taking free money... )

Corporations are the real socialists, folks. And we pay for it. And not as customers.

[hypnotoad72]

Not always as customers, rather... if this were truly a free market, without our subsidizing them with our tax money, they wouldn't last 2 minutes without having privacy and other regulations lifted so they could benefit from it.