Record numbers of United States expatriates, including those resident in Switzerland, are turning their backs on their home country as the side-effects of aggressive anti-tax evasion laws adversely affect honest tax payers.
Some 1,131 US passport holders living overseas renounced their citizenship in the second quarter of 2013, a six-fold rise on the 189 that did so in the same period last year, according to the US government’s Federal Register, quoted by the Bloomberg news agency.
This was also a leap up in comparison with the first quarter, when 679 people did so, according to US government statistics, and compares with a total of 235 for the whole of 2008.
Proportionately, it appears Switzerland had a high number of renunications, with an unconfirmed figure of 900 such cases last year, according to the Geneva-based group American Citizens Abroad (ACA).
Anne Hornung-Soukup, a member of the ACA executive committee, told Le Temps newspaper on Friday that the figure of 900 had been quoted by outgoing US Ambassador to Switzerland Donald Beyer speaking at an event in February.
The US embassy in Bern told swissinfo.ch last October that 411 cases had been processed in the first nine months of 2012, compared to a total of 180 Americans who gave up their passports in the whole of 2011.
The embassy did not respond to requests for more up-to-date figures.
The US is the only Organisation for Economic Cooperation and Development (OECD) country that taxes citizens wherever they live abroad.
The paperwork involved in keeping on the right side of the US tax authorities, and the complications of opening a normal Swiss bank account, have multiplied in the wake of a tax evasion row between Switzerland and the US.
“Shame and discomfort”
The imminent arrival of the US Foreign Account Tax Compliance Act (Fatca) in Switzerland threatens to make life even harder for Swiss-based US nationals.
Hornung-Soukup said that a US passport had become “toxic” to many of her compatriots, but denied that more US citizens are giving up their passports in order to avoid paying taxes.
Instead, she blamed increasingly aggressive anti-tax evasion regulation by the US authorities that has mired even honest tax payers in a growing mountain of red tape.
“Tax reasons are not to blame. It’s more the administrative and logistic costs, as well as threats of fines,” she said. “More and more [Swiss] banks are refusing their services, for a loan, mortgage or life insurance on the pretext that we are US citizens.”
Hornung-Soukup also condemned the US practice of publishing lists of people who renounced their citizenship.
“These are made accessible to the public in order to create a feeling of shame and discomfort,” she said.
swissinfo.ch and agencies