Uncle Sam, say goodbye to Eduardo Saverin and $67 million in taxes
How much will Eduardo Saverin save by ditching his U.S. citizenship?
At least a cool $67 million in federal taxes according to analysis by Bloomberg.
The financial news service came to that number by comparing the value of the Facebook shares Saverin had when he renounced his citizenship sometime around September ($2.44 billion) with the value of those same shares now (an estimated $2.89 billion).
Then they applied the 15% capital gains rate to the approximate $448 million spread between the two numbers and voila -- $67 million.
And it gets even better for Saverin because his adopted home of Singapore does not collect capital gains tax. That means that any profit Saverin earns from future appreciation of his Facebook stock will be tax free.
Still, Saverin’s spokespeople are adamant the 30-year-old billionaire’s decision to renounce his U.S. citizenship has nothing to do with tax evasion and everything to do with wanting to establish a permanent residence in Singapore, a convenient perch to invest in Asia.
“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Sabrina Strauss said in an emailed statement to the Los Angeles Times last week. “He plans to invest in Brazilian and global companies that have strong interests in entering the Asian markets. Accordingly, it made the most sense for him to use Singapore as a home base.”
Another spokesperson for Saverin told Bloomberg that the calculations and assumptions the analyst made “were not only erroneous, they also further perpetuate the false impression that tax was the reason behind Eduardo’s decision.”
However, the spokesperson did not cite specific errors.
If you’re wondering why a guy sitting on more than $2 billion in Facebook shares would even care about a paltry $67 million, remember that the $2.4 billion number is Saverin’s paper value, while the $67 million he’d owe in federal taxes would have to come out of his pocket.
As the Los Angeles Times reported earlier, Mark Zuckerberg has said he will sell 30.2 million of his 533.8 million shares just to cover tax charges.
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