US slashes fee for renouncing citizenship from $2,350 to $450

The United States has announced a major reduction in the fee required for citizens who wish to formally renounce their nationality, cutting the cost by more than 80 per cent. The decision has been welcomed by the “Accidental Americans,” a group that has long complained about the burdens of the US tax system.

According to a notice published in the Federal Register, the US government’s official journal, the consular fee for renouncing American citizenship will drop from $2,350 to $450 beginning April 13.

The reduction effectively cancels the sharp increase introduced in 2015 and restores the charge to the level originally set when the fee was first implemented in 2010.

Officials said the change followed consideration of “the not insignificant anecdotal evidence regarding tax-related difficulties many U.S. nationals residing abroad encounter,” as stated in the notice released on Friday.

The Paris-based Association of Accidental Americans (AAA), a non-profit organisation, welcomed the development, describing it as the direct outcome of sustained advocacy and legal action.

“This fee reduction is a concrete first victory,” AAA founder and president Fabien Lehagre said in a statement posted on social media.

The United States operates a citizenship-based taxation system, meaning citizens are taxed regardless of where they live. Advocacy groups such as AAA argue that this policy places heavy reporting obligations on Americans abroad and can make it difficult for them to access banking services.

Under regulations including the Foreign Account Tax Compliance Act (FATCA), US citizens must disclose detailed information about any foreign bank accounts when filing their annual tax returns.

AFP