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| A lion dance in New York's Chinatown. (File photo/Xinhua) |
An
increasing number of wealthy Chinese said they regret emigrating to the United
States as the US government plans to implement a new law requiring US citizens
to pay taxes on their overseas income.
The law,
expected to be passed by the end of this year, requires US nationals or
passport holders wherever they live to pay taxes on their overseas assets and
income. It is expected to increase America's tax revenues over the next decade
by US$9 billion, according to the South China Morning Post in Hong Kong.
Tax issues
are often not a consideration for people seeking to become US citizens but the
new law will likely change that. The law applies to a wide range of people and
even includes the properties of the deceased. US nationals and passport holders
will have to go through complicated tax-filing processes and encounter
difficulties in opening an account overseas. They will also face tremendous
difficulties establishing a business abroad since their foreign business
partners will not want their data appearing on the radar of the US authorities.
The number
of people who have decided to abandon their US citizenship increased from 280
in 2006 to 1,780 last year. The figure does not include people who gave up
their right to permanent residence. The new tax regulations burden will prompt
more US citizens to abandon their citizenship, said Anthony Tong, partner of
PwC Hong Kong.
The thought
of the IRS examining their income earned around the globe to see if they have
evaded taxes will be offputting to many wealthy US citizens of Chinese origin,
according to an immigration lawyer in Hong Kong. It is very difficult to find a
Chinese entrepreneur with a perfectly clean tax record, the lawyer said,
according to People's Daily.
Giving up
US citizenship can also be a costly process, however, and take one to two
years. To avoid the person who gives up their citizenship becoming stateless,
the US government requires the individual to adopt citizenship of another
country. The person also faces hefty taxes and fees for the process, including
lawyer's fees of US$30,000. The amount charged differs according to the method
of calculation and the date the person hands over their US passport, according
to People's Daily.
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