By Henry Decker

Facebook Co-Founder Renounces Citizenship To Dodge Taxes

May 11, 2012 4:58 pm Category: Memo Pad Leave a comment A+ / A-

Eduardo Saverin, one of the co-founders of Facebook, has renounced his U.S. citizenship in an effort to lessen his tax load after the social network’s massive initial public offering.

Saverin — who was memorably portrayed as a well-meaning business neophyte in the 2010 film The Social Network — was born in Brazil and is currently a resident of Singapore. Saverin became a U.S. citizen in 1998, but his spokesman told Bloomberg News that he decided to renounce his citizenship “around September” of last year.

The decision will save Saverin a fortune. He holds a roughly 4 percent stake in Facebook,  which Bloomberg estimates could be worth as much as $3.84 billion after Facebook’s massive IPO. That money would be subject to taxes in the United States, but Singapore does not have a capital gains tax.

Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school, told Bloomberg that Saverin’s decision was “a very smart idea,” from a tax standpoint. “Once it’s public you can’t fool around with the value.”

So instead of paying his fair share to the country that helped him make billions, Saverin will spend his cash “lounging with models and wealthy friends at local night clubs,” and “racking up tens of thousands of dollars in bar tabs by ordering bottles of Cristal Champagne and Belvedere vodka.”

Saverin won’t completely escape the IRS; Americans who renounce their citizenship still must pay an exit tax on the capital gains from their stock holdings, even if they don’t sell their shares.

Facebook Co-Founder Renounces Citizenship To Dodge Taxes Reviewed by on . Eduardo Saverin, one of the co-founders of Facebook, has renounced his U.S. citizenship in an effort to lessen his tax load after the social network's massive i Eduardo Saverin, one of the co-founders of Facebook, has renounced his U.S. citizenship in an effort to lessen his tax load after the social network's massive i Rating:

More by Henry Decker

Midterm Roundup: Is North Carolina Going Blue?

Here are some interesting stories on the midterm campaigns that you may have missed on Thursday, September 18: • According to a new Fox News poll, Senator Kay Hagan (D-NC) now leads Republican challenger Thom Tillis by 5 percent. The poll is just one of many to show the embattled Democrat hanging on to a

Read more...

Better Together?

Is the world ready for Scottish independence?

Read more...

Midterm Roundup: Another Plagiarism Scandal

Get the latest news on the key midterm races.

Read more...

Tags

Comments

scroll to top