US to slash fee for renouncing citizenship

The United States will drop the price for Americans looking to formally renounce their citizenship by more than 80 per cent, a move welcomed by the “Accidental Americans” struggling with the US tax system.

Consular fees for renouncing US citizenship will be reduced from $2,350 to $450 starting April 13, according to a notice in the Federal Register, the US government’s official journal.

The move reverses a 2015 price hike and returns the fee to the level when it was introduced in 2010.

The decision was made after taking into account “the not insignificant anecdotal evidence regarding tax-related difficulties many U.S. nationals residing abroad encounter,” according to the notice published on Friday.

The Association of Accidental Americans (AAA), a non-profit based in Paris, welcomed the decision and said it was the “direct result” of legal action and advocacy.

“This fee reduction is a concrete first victory,” AAA founder and president Fabien Lehagre said in a statement on social media.

The United States taxes citizens based on nationality and not place of residence, which groups like AAA argue imposes steep demands on tax reporting for Americans living abroad and makes it harder for them to open bank accounts.

Under laws such as the Foreign Account Tax Compliance Act (FATCA), US citizens are required to file extensive details on any foreign bank accounts with their yearly tax returns.

AFP