For the second year on the trot, the number of US citizens renouncing their passports is set to reach new records.
In 2013, 3,000 US passports were handed back and this year is on track to be even higher.
So, from 10th September, the cost of “not being an American” rises by over 400%. The US State Department is increasing the cost of renunciation of US citizenship from 450 to 2,350 dollars.
The increase seems to be prompted by actions taken by the US Government to track down undeclared assets of American citizens held abroad; particularly implementation of “FACTA” (Foreign Account Tax Compliance Act), intended to obtain information on accounts held by US taxpayers.
It has also been said that more Americans living abroad are becoming aware of their US tax reporting obligations; for example, the requirement to file a Report of Foreign Bank and Financial Accounts; due to the US “worldwide” tax code, which subjects all of an individual’s earnings to US taxation.
The State Department has noted that application demand for the renunciation of citizenship has increased substantially, and that, as the process involves a costly use of foreign consular time in processing cases, it should be charged at its cost.