Facebook co-founder Saverin targeted by US senators for tax ‘avoidance scheme’

Sens. Charles Schumer (D-NY) and Bob Casey (D-PA) announced plans to introduce a bill to respond to Facebook co-founder Eduardo Saverin decision to renounce his US citizenship and become a resident of Singapore.

The move drew criticism as reports pointed out that the move would save Saverin — who owns a part of Facebook — millions of dollars in taxes after the company goes public. Saverin has denied that he is moving for tax purposes, and has said that his decision was based solely on his business investments. Casey’s office said the bill is called the “Ex-PATRIOT” Act, which stands for the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act. Under the proposal, “any expatriate with either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years will be presumed to have renounced their citizenship for tax avoidance purposes,” according to a release from Schumer’s office, and they would pay 30 percent capital gains tax — the same rate as people pay in the US. If an expatriate can prove he or she has a legitimate reason for renouncing U.S. citizenship, no penalties will apply. The bill would tax any prospective gains an expatriate who has renounced his or her citizenship in the past ten years who did so for purposes of tax avoidance.