A recent case here in NZ a guy with US and NZ citizenship retired and sold a business after living in NZ for almost 40 years and paying NZ taxes.
The IRS are after him for capital gains tax. It seems you can’t renounce your US citizenship to avoid taxes.
did he renounce after selling the business?
I don’t know whether he tried on not. The general rules are that you can not renounce your citizenship to avoid tax.
Actually, US Citizens can renounce their citizenship to gain tax advantages. For awhile, some very wealthy people were doing so. However, under current tax rules enacted to stem the practice, most people figure it’s no longer worth it. Renouncing US citizenship to avoid taxes may still be a viable strategy for younger tech entrepreneurs on the cusp of a major windfall or who have many years of big earnings ahead of them.
The US tax system provides the wealthy with many perfectly legal loopholes and exemptions that makes their net tax rates relatively low.
Since US practise Citizenship by birth right, anybody born in USA are regarded as a US citizen. (As well as by naturalisation)
As US taxation is also by citizenship, not residency, is it at all possible to escape taxation, even by renunciation? (Dual citizenship is not good enough)
With the new restrictions on entry into the US, is it still possible for someone who have renounced their US citizenship and taken up the citizenship of some tax heaven to stay in the US more than the duration of a tourist visa, let alone do any kind of work while in country?
BTW; I found this website which detail how much the richest 1% of US citizens actually pay in taxes:
True or fake news??
I know a well off Canadian citizen that lives and works in the US on a green card. He decided not to become a US citizen for tax reasons. While he lives and works in the US, he pays US taxes like everyone else. But when retires and returns to Canada, or goes elsewhere, he will not have to pay US taxes.
The IRS does not chase former green card holders who leave the US for taxes, but they do chase US citizens.
The best legal offshore tax haven for US citizens is Puerto Rico. US citizens who live in Puerto Rico 180 days per year do not have to file US tax returns or pay US taxes, EXCEPT on income earned elsewhere in the US. Instead they file Puerto Rico tax returns and pay Puerto Rico taxes, however Puerto Rico grants generous tax exemptions to new residents and businesses. Puerto Rico is trying to attract capital and investment, and retirees with money to Puerto Rico.
Residents of the US Virgin Islands also do not have to file or pay US taxes, EXCEPT on US income, but the Virgin Islands has its own high income tax. The Virgin Islands is Not a tax haven.
Another interesting thing about the Virgin Islands, it is exempt from the Jones Act. However, consumer goods are more expensive in the Virgin Islands than they are in Puerto Rico.
As a US citizen, you have to pay Uncle Sam but if you work foreign flag, you might be able to get a little break but if guys are telling you stuff that seems too good to be true… it probably is
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