Swiss-Americans ditch US passports
Lyssandra Sears · 26 Jun 2012, 09:48
Published: 26 Jun 2012 10:02 GMT+02:00
Updated: 26 Jun 2012 09:48 GMT+02:00
The number of dual nationality Swiss-Americans renouncing their US passports has risen sharply in recent years, due in large part to the pressure being exerted by the IRS, the US tax authority, online news site Le Matin reported.
The United States is one of the only countries in the world that taxes its citizens even when they have settled abroad. This means that all Americans living in Switzerland, even if they have dual American-Swiss nationality, must complete and submit a US tax return.
In addition to this tax return burden, the recent pressure placed on Swiss banks by the IRS to disclose details of US clients to ensure compliance with the US tax regime has caused Swiss banks and asset managers to reject clients with any US affiliation. In one case, a man who had been settled in Switzerland was thrown out of his bank for having US citizenship.
Frustrated by the bureaucratic hurdles forced upon them by Washington, many people are opting to give up their little blue passports.
Last year, some 2,000 people worldwide renounced their US citizenship, a figure seven-times higher than it was four years ago. Of those 2,000, some 500 came from Switzerland, newspaper Tages Anzeiger reports.
Ryan Larson, a US tax expert living in Zurich, confirmed that he has also seen more and more dual nationals give up their US passports. In 2011, he helped some 50 people renounce their US citizenship, while in 2010 he dealt with only half that number.
Larson expects the situation to further worsen when the new Foreign Account Tax Compliance Act comes in to force next year. The new law will require banks either to give up details of their US clients or to withhold 30 percent on all receipts from the US, Le Matin reported.