For members


EXPLAINED: Why do US citizens in Switzerland give up their American passports?

As the US election is only days away, it is interesting to look at the reasons that push many American citizens living abroad — including in Switzerland — to take a drastic and irrevocable step of renouncing their US citizenships.

EXPLAINED: Why do US citizens in Switzerland give up their American passports?
Giving up US citizenship is irrevocable- Photo by AFP

How many US citizens live in Switzerland and how many have given up their American passports?

There about 7 million Americans living outside of the United States, but the real number is likely higher, as some may not be registered with consular services in their country of residence.

In Switzerland alone, the number of US citizens is estimated, roughly, at 30,000. However, dual nationals — those who retain their US citizenship in addition to the Swiss one — are not counted in the official statistics as Americans, but only as Swiss.

Globally, more than 5,800 Americans gave up their citizenship in the first six months of 2020, compared to the 2,072 in all of 2019, according to Bambridge Accountants, a New York-based firm specializing in US expat tax issues.

The US government is not releasing the number of renunciations by country, so exact figures for Switzerland are hard to come by.

The Local has knowledge of hundreds of Americans who have either renounced their citizenship at the US Embassy in Bern, or have already filed their applications there but are waiting for an appointment.

The number of renunciations is not high if viewed on annual basis. But if taken collectively over several years, it is proportionally significant.

Why do US nationals give up their passports?

The main reason is taxes and other financial constraints.

Not only are Americans abroad required to report to the US government their assets held in foreign banks – for instance savings accounts and mortgages – but also to declare the income they earn in their countries of residence.

Even though their income is generated in a foreign country — where they already pay taxes — expatriates must also file tax returns in the United States, the only industrialised nation that taxes its citizens on worldwide earnings.

Even if a US citizen living overseas doesn’t owe any money to Uncle Sam, they have to deal with complex and confusing filing rules that change frequently.

And the penalty for even unintentional errors is steep. US government can impose a fine of $10,000 a year for undisclosed foreign accounts, even if they don’t generate any taxable income in the United States.

The rules concern not only US expatriates, many of whom eventually do return to the United States. They apply also to the so-called ‘accidental Americans’— those born abroad to US parents, but who have never lived in the US themselves.

This is what some Americans in Switzerland who had given up their US passports told The Local:

“Having to divulge my foreign accounts to the US and to pay taxes on income that wasn’t earned in the United States did not seem fair, and it was a huge financial burden”. (William B., Geneva)

“I already pay taxes in Switzerland. Why should I also pay in the US? I will never go back to live there, so will draw zero benefits from all the taxes I’ve paid”. (R.L. Zug).

“I was born in Switzerland and never lived in the US. I got my citizenship through my American dad. Why am I supposed to be financially obligated to a country to which I have no ties?” (Carole D., Lausanne).

And a contributor to Switzerland’s expat forum wrote that she had given up her US passport “and never regretted it. Finding out that I was supposed to be filing in US tax returns over 40 years after I'd left the country was just ridiculous to me”.

How do Americans go about renouncing their passports in Switzerland?

The process is explained on the website of the US Embassy in Bern. 

“If you decide that this is the course of action you wish to pursue, there are several steps you need to take. including an interview at the U.S. Embassy in Bern”.

“At the in-person interview you must demonstrate to the consular officer that you fully understand the nature and consequences of the oath of renunciation, that you are not subject to duress or undue influence, and that you are voluntarily and intentionally seeking to renounce your U.S. citizenship.”

Citizens can give up their passport only if they are tax-compliant, that is, if they have filed their declarations each year and don’t owe any US tax. Otherwise, they must pay up what they owe before they are allowed to proceed with the process of renunciation.

Also, they must pay a $2,350 fee. The whole process takes between several weeks to months, depending on how many applicants the embassy has at any given moment.

Currently, due to the pandemic, the embassy in Bern is handling only a limited number of cases.

An important thing to remember is that only people who have dual nationality can give up their US passports.

What are the disadvantages of renouncing US citizenship?

This act is irrevocable — once a person is stripped of his or her citizenship, they can never get it back.

By giving up their passports, they also renounce their rights as citizens, including permanent residence, work, and voting.

Ex-Americans can still visit the United States, but only under the same conditions as any other foreigner, which may include visa requirements and limits on the time they can remain in the country.





Member comments

  1. I have both. But currently live in the US. I tend to be less critical than some sideline commentators of US policy but worldwide taxation–I have to admit–is as dumb and as unfair as it gets. Were I to move back to CH I dump my US passport like my morning constitutional.

  2. This article does not mention how the US taxes American citizens living abroad on their 2nd pilar pensions as well. All contributions, including the employer match are considered income and therefore taxed. Donald Trump can get away with years of tax fraud but us average working citizens are supposed to be penalized for our foreign pensions. It truly is an outrage!

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For members


EXPLAINED: How Zurich has simplified the Swiss citizenship process

Voters in the Swiss canton of Zurich on May 15th approved a proposal to simplify naturalisation requirements for the canton's 350,000 foreigners. Here's what you need to know.

EXPLAINED: How Zurich has simplified the Swiss citizenship process

On May 15th, voters in the Swiss canton of Zurich overwhelmingly approved a proposal to simplify the canton’s naturalisation process for foreigners. 

Several questions were on the ballot, including reduced fees for younger people who pursue Swiss citizenship, longer waiting times for those convicted of criminal offences and a shift towards online naturalisation. A summary of the results can be seen here

For foreigners living in Zurich and wanting to acquire the famous red passport, perhaps the most important question on the ballot was making the requirements uniform on a cantonal basis, rather than allowing them to differ from municipality to municipality, as is the current case. 

Here’s what you need to know. Please note that while Zurich voters approved the changes, as at May 16th they have not been formally implemented. 

‘Uniform basic requirements’ for citizenship

While anyone who is successfully naturalised will get the same famous red passport no matter where they do so, the actual process differs dramatically depending on where you do it. 

The primary naturalisation process takes place at a communal level, which means there can be different requirements from municipality to municipality. 

With 26 cantons, four official languages and century after century of tradition, these traditions and cultural quirks have had plenty of time to ferment and develop. 

As The Local has covered several times before, this includes a knowledge test about specifics in the local commune which often leads to absurd consequences, while in some places local villagers and neighbours will have a say on whether a person should receive citizenship. 

People have been knocked back for a range of reasons, including not liking hiking, not knowing enough about local zoo animals, not knowing enough about cheese and just not being deserving enough.  

READ MORE: The ten most surprising questions on Switzerland’s citizenship exam

Recognising the difficulties, the Swiss government in 2018 revised the Civil Rights Act, which included uniform basic requirements for citizenship. 

The cantons however retain a degree of flexibility when it comes to implementing the rules, which is why they were put to a vote on May 15th. 

Basic knowledge test

Each naturalisation process includes a basic knowledge test. 

The tests are carried out at a municipal level and vary from place to place, prompting Swiss national broadcaster SRF to report in 2017 that Switzerland “has as many naturalisation procedures as there are municipalities”. 

Zurich, Switzerland’s most populous canton, has 162 municipalities. While it might be a slight exaggeration to say there are 162 unique tests, the questions can vary greatly. 

The May 15th vote standardised the process by establishing a basic knowledge test for the entire canton. 

The test includes 350 questions about Swiss history, tradition, politics and culture, with a focus on Zurich. 

Anyone taking the test will be given 50 questions at random and must answer at least 30 correctly to pass. 

What other requirements were up for a vote on May 15th?

In addition to the above, there are three other changes forecast as part of the new rules. 

People under 18 will face tighter rules for naturalisation if they are found guilty of a crime. 

Referendum: Zurich to vote on lower voting age

According to the new law, juveniles will not be able to apply for naturalisation for two years after a minor crime (i.e. shoplifting, simple bodily harm, property damage) or for five years for major crimes (i.e. robbery, murder, rape). 

The changes will also lay the groundwork for naturalisation processes to take place online. A handful of cantons including Bern and Vaud already do this, but no such online system is established in Zurich. 

Finally, the law will also reduce the cost for younger people to apply for citizenship. 

More information is available here. 

What did the parties say before the vote?

Although polling was minimal, the changes have won widespread support among Swiss political parties. 

All of the major Swiss political parties support the change, with only the right-wing Swiss People’s Party (SVP) opposed. 

Writing in the Swiss press, the SVP’s Diego Bonato suggested multicultural Zurich should have tighter naturalisation rules than the rest of the country rather than the other way around to ensure proper integration. 

“The higher the multicultural proportion of the population, the more closely you have to pay attention to naturalisation” 

While the SVP is Switzerland’s largest and most popular political party, it has comparatively lower influence in Zurich. 

The Social Democrats, who hold the mayorship in the city, are in favour of the proposal and hit back at suggestions it did not promote integration. 

“The new citizenship law is shaped by the idea that early and rapid naturalisation promotes integration. However, citizenship should be the the end of successful integration, not the beginning.”

“Foreigners who wish to remain in our country permanently and become part of Swiss society must society, must (still) undergo an integration process lasting several years.”

Who was able to vote?

Much like Switzerland’s men taking until the 1970s to decide whether women should get the vote, it is perhaps a paradox that foreigners’ fates will be put to a vote without their input. 

Only Swiss citizens have the right to vote in the most cases, although there are limited voting rights in some cases at a municipal level in some parts of the country. 

Efforts to provide similar rights in Zurich have continued to stall. 

Around one quarter of Zurich’s population do not have the right to vote, although it can be as high as 50 percent in some municipalities. 

Approximately 1.5 million people live in Zurich. 

More information about voting in Zurich, including details about the upcoming referendum votes, can be found here.