Research reveals US expats don’t like tax rules for those working overseas

by Ray Clancy on May 31, 2017

The vast majority of US expats do not feel that their interests are fairly represented by the US Government, according to an annual survey, and they also dislike the tax regime.

Overall 88% are unhappy and tax is a major issue with 66% saying that they do not feel they should be required to file a US Tax Return while living abroad. The US is a unique case where citizens living abroad must file a tax return in the country of their birth.


The survey from expat tax specialists Greenback, also found that 62% of expats reported that they did not owe any taxes last year or receive a refund. Under the FACTA rules introduced in 2010 all American taxpayers must file their foreign financial accounts and offshore assets.

There has been concerns that more expats would renounce their citizenship due to tax rules and the election of Donald Trump as President, but the survey found that 43% are not currently considering it but wouldn’t rule it out, 19% are seriously considering it but haven’t made a decision yet and 5% are already planning to renounce.

Some 50% of those considering or planning renunciation cite the burden of US tax filing requirements as the reason, up 13% from 2016.

The survey also found that 57% of US expats would support an initiative to repeal FATCA and 10% are seeking a new bank because their foreign financial institution doesn’t want to deal with US citizens, down 2% from 2016.

Out of more than 2,100 respondents, some 64% reported having voted in the 2016 US presidential election, although in 2016 over 73% said they intended to vote in the then-upcoming election.

Of those who didn’t vote, 36% said it was because they didn’t feel any candidate represented their interests, up from 26% in 2016 and 8% in 2015.

‘Reports have shown that in the last quarter of 2016, the time period coinciding with the election of Donald Trump to the US Presidency, nearly double the amount of people renounced their citizenship as compared to the same period in 2015. Greenback survey data provides further evidence that expats aren’t, at large, enamoured of Donald Trump,’ said David McKeegan, co-founder of Greenback Expat Tax Services.

He also pointed out that when asked how the result of the 2016 presidential election affected their thoughts on renouncing their US citizenship some 48% said it had made them somewhat more likely to renounce and 18% cited it as a major factor contributing to their decision.

The research found that the top issue that American expats want addressed are the citizen based tax rules, while they would also like to see a simplified tax filing process and an increase in the foreign earned income exclusion and other tax and credit deductions to lower the tax burden.

The report concludes that there is an ongoing trend toward citizenship renunciation with the new presidential administration seemingly contributing to expats’ decision to renounce. ‘The vast majority of expats don’t feel their interests are fairly represented by the US government and continue to be frustrated by the obligations of citizenship based taxation and the burdensome tax filing process,’ said McKeegan.

‘This year’s survey once again reinforces the fact that only a small percentage of Americans abroad feel their needs are acknowledged and advocated for. That perception, plus the strain that comes with onerous expat tax obligations, makes renouncing citizenship a desirable option for many,’ he added.

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