Residence-Based Taxation Sought For US Expats

By Hans Esser, for 22 March, 2017

American Citizens Abroad, a US expat advocacy group, is calling on Congress to legislate for residence-based taxation for overseas Americans.

ACA is campaigning for Congress to move the US away from a taxation system based on citizenship. It intends to prepare revenue estimates and a data package to show to legislators that the change can be made revenue neutral.

Currently, US citizens must file US tax returns and pay US tax on their worldwide income, even if they do not live in or travel to the US. Most other jurisdictions in the world tax individuals on the basis of residency. The ACA said the US is therefore "an outlier" in continuing to levy tax on this basis, along with the small African country of Eritrea.

According to the ACA, the House Republican Blueprint for tax reform "opens the door for this important change," as the Ways and Means Committee intends to consider the treatment of US citizens living and working abroad.

"Residency-based taxation for individuals is a relatively straightforward exercise and does not risk 'muddying the water' for changes regarding corporate international taxation. There are no obvious roadblocks to undertaking this step," said ACA Global Foundation Chairman Charles Bruce.

Tags: Individuals | Tax | Eritrea | Expat Groups | United States | Tax Reform | Expats | Africa |


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