More Americans are renouncing their citizenship, according to data from the U.S. Treasury Department, and 2017 could be a record-breaking year for the number of expatriates if the trend continues.
Since the start of the year, more than 4,400 Americans renounced their citizenship. If this year’s final quarter mirrors last year’s, Bloomberg estimates that 6,813 Americans will have chosen to expatriate in 2017.
The total number last year was 5,411 — a 26-percent jump from the previous year. (The Department of State estimated that 9 million Americans lived abroad in 2016.)
Reasons for renunciation vary from person to person but, contrary to popular belief, are unlikely to be about politics.
In order to renounce American citizenship, a person must appear in a U.S. Embassy or Consulate and sign an oath in front of a diplomatic officer. Renunciation is irrevocable and once relinquished, a person cannot re-obtain American citizenship. And with a $2,350 fee, the U.S. is also the most expensive country in the world from which to expatriate.
Instead, people may choose to renunciate citizenship for financial reasons. When an American chooses to live abroad, they must not only pay American taxes but the taxes in their country of residence.
The number of renunciations has been increasing ever since 2010 (with the exception of 2012), when the government passed the Foreign Account Tax Compliance Act (Facta) of 2010. The act requires foreign banks to report assets and financial information about American expats abroad — or else risk penalties. It was passed in an effort to curb tax evasion, but has made it more difficult for Americans to open bank accounts abroad.
The Treasury Department reported that 2011 was the first time that annual renunciations exceeded 1,000 citizens.