Taxation USA is on Global income much like Australia

[marki]

Mr Berg, who will visit Australia this month to hold seminars for US expats, said the situation was likely to lead to a wave of citizenship renouncement. The provision applies from November 22, 2017 and there was little avenue for mitigation, he said.

Read more: Trump tax plan a 'killer' for expats in Australia
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This is a very interesting read. Trumps tax plan is a killer for expats in Australia
Expatriate Americans with businesses in Australia are in for a nasty surprise as a result of the Trump tax plan.

Much attention has been paid to the one-off "deemed repatriation tax" of 15.5 per cent for giants like Apple and Google.

But in fact any dual US citizen with retained earnings in a private business located outside America will be hit.

"If you own a private corporation, there's a one-time tax that you're going to be subject to and it's a killer," said Roy Berg, an American lawyer who works for Moodys Gartner Tax Law in Canada and is personally affected.

"It's at 15.5 per cent on cash assets and 8 per cent on non-cash assets.

"For example, a doctor with his own practice in Australia who has US dual citizenship or a green card and $2 million of accumulated wealth sitting in his corporation would have $300,000 of his hard-earned Australian dollars confiscated by the US government this year."


Salary and wage earners are not affected.

Any individual US citizen or green card holder owning more than 10 per cent of a "controlled foreign corporation" will be required to pay the tax within eight years, according to American Citizens Abroad.

Well what do the dual citizens think of this? I certainly won't be going ahead with green card application now.

Read more: Trump tax plan a 'killer' for expats in Australia
Follow us: @FinancialReview on Twitter | financialreview on Facebook

 

[Hvr]

Renouncing US citizenship is not cheap, it costs USD$2,350 and is a time consuming process.

Sometimes there are advantages to only having one citizenship.

 

[marki]

I think it is cheaper than paying the tax owed.

 

[Isochronous]

For $300,000 USD, may as well renounce US citizenship and buy citizenship through an investor scheme somewhere like St Kitts.

 

[drron]

The cost of renouncing US citizenship is a drop in the ocean for those who are hit by the US tax act.Even before these changes you had to declare your income no matter where in the world it was earnt.There have been quite a few high profile folks renouncing their US citizenship.
The real problem comes when your US citizenship has gone.They can get quite vindictive and make it very hard to visit the US.

 

[VPS]

Trouble is you can't renounce your citizenship until you are tax compliant. Lots of friends going through major issues now.