US expatriates' hopes for an end to double taxation gained new momentum on Wednesday, as a politician introduced a bill in the House of Representatives that would allow citizens living abroad to switch to a residence-based taxation model.
The bill, put forward by Representative Darin LaHood of Illinois, is in line with president-elect Donald Trump's campaign pledge to end double taxation for Americans living abroad, who for years have complained about the complicated and costly process to remain compliant with the tax system.
News of the bill's introduction was first reported by The Wall Street Journal.
The US is the only major country in the world that taxes its citizens based on citizenship instead of residency. Americans living abroad still have to file taxes with the Internal Revenue Service, which can cost hundreds of dollars to complete even though about 60 per cent do not owe taxes, according to the Taxpayer Advocate Service.
Those obligations apply to millions of Americans living abroad – estimates range from 3.9 million to 5.5 million – including so-called accidental Americans who are unaware they hold dual citizenship.
Residence-Based Taxation for Americans Abroad Act
The new bill, called the Residence-Based Taxation for Americans Abroad Act, would establish a process through which Americans living overseas can elect to be treated as a non-resident without having to renounce their citizenship.
By doing so and moving to a residence-based tax model, their foreign-based income would be exempt from US taxes. Those with US-sourced income including real estate, investments and retirement income would still have to pay US taxes.
“In today’s world, Americans choose to live and work abroad for a host of reasons, and that does not mean that they should be subject to more onerous tax and compliance burdens,” Mr LaHood said in a statement.
America's wealthiest – those with a net worth higher than $13.61 million – would have to pay a departure tax if they opt out of the US system.
Those with a net worth of less than that amount and citizens who have not lived in the US since they turned 25 years old or since March 2010 could avoid the departure tax. Americans who have been tax compliant with the US in the past three to five years could also avoid it.
Income tax
The introduction of the bill received bipartisan support from groups advocating for Americans living abroad. Solomon Yue, president of Republicans Overseas, told The National that the bill “really shows momentum” on Mr Trump's campaign pledge. Mr Trump made the pledge in a statement to Republicans Overseas in October.
“We welcome any member of congress for supporting president Trump's pledge to end double taxation for overseas Americans,” Mr Yue said.
Tax loopholes
Democrats Abroad also welcomed the introduction of the bill and highlighted the bill's efforts to ensure it would not create loopholes for those hoping to evade US taxes.
“I’m extremely proud of the role Democrats Abroad has played in elevating the issue of the unfair tax burdens faced by ordinary Americans abroad and proposing ways to address them,” Rebecca Lammers, chairwoman of the Democrats Abroad Taxation Task Force, said in a statement.
Mr LaHood worked closely with Tax Fairness for Americans Abroad, a non-profit organisation, to draft the bill. Paris-based lawyer Laura Snyder said the bill was the result of direct work of TFFAA and its non-partisan organisations Stop Extraterritorial American Taxation and the Association of Americans Resident Overseas.
“The introduction of this bill is a milestone,” Ms Snyder, who holds positions in both organisations, told The National in a statement.
Mr LaHood told the Journal he hopes the bill can be included as part of tax legislation when Congress begins its new session next year.
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Sector: Tech
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Stage of funding: Seed
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
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- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
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UAE v Ireland
1st ODI, UAE win by 6 wickets
2nd ODI, January 12
3rd ODI, January 14
4th ODI, January 16
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
City's slump
L - Juventus, 2-0
D - C Palace, 2-2
W - N Forest, 3-0
L - Liverpool, 2-0
D - Feyenoord, 3-3
L - Tottenham, 4-0
L - Brighton, 2-1
L - Sporting, 4-1
L - Bournemouth, 2-1
L - Tottenham, 2-1
if you go
The flights Fly Dubai, Air Arabia, Emirates, Etihad, and Royal Jordanian all offer direct, three-and-a-half-hour flights from the UAE to the Jordanian capital Amman. Alternatively, from June Fly Dubai will offer a new direct service from Dubai to Aqaba in the south of the country. See the airlines’ respective sites for varying prices or search on reliable price-comparison site Skyscanner.
The trip
Jamie Lafferty was a guest of the Jordan Tourist Board. For more information on adventure tourism in Jordan see Visit Jordan. A number of new and established tour companies offer the chance to go caving, rock-climbing, canyoning, and mountaineering in Jordan. Prices vary depending on how many activities you want to do and how many days you plan to stay in the country. Among the leaders are Terhaal, who offer a two-day canyoning trip from Dh845 per person. If you really want to push your limits, contact the Stronger Team. For a more trek-focused trip, KE Adventure offers an eight-day trip from Dh5,300 per person.
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
Day 1, Abu Dhabi Test: At a glance
Moment of the day Dimuth Karunaratne had batted with plenty of pluck, and no little skill, in getting to within seven runs of a first-day century. Then, while he ran what he thought was a comfortable single to mid-on, his batting partner Dinesh Chandimal opted to stay at home. The opener was run out by the length of the pitch.
Stat of the day - 1 One six was hit on Day 1. The boundary was only breached 18 times in total over the course of the 90 overs. When it did arrive, the lone six was a thing of beauty, as Niroshan Dickwella effortlessly clipped Mohammed Amir over the square-leg boundary.
The verdict Three wickets down at lunch, on a featherbed wicket having won the toss, and Sri Lanka’s fragile confidence must have been waning. Then Karunaratne and Chandimal's alliance of precisely 100 gave them a foothold in the match. Dickwella’s free-spirited strokeplay meant the Sri Lankans were handily placed at 227 for four at the close.
