Shifting away from the United States is a plan that might seem good in a book, but not in reality as Facebook’s co-founder, Eduardo Saverin will have to actually pay to get away, not in bribery, but in his tax dues. Saverin wanted to shift to Singapore to avoid paying taxing through profits from the Facebook’s IPO. Now, he has to pay $43 million for his past tax dues.
Singapore is an ideal country with no capital gains tax, but not if you are a U.S. citizen whose $43 million in taxes are still due. Saverin ideally would have gotten away with $100 million in capital gains tax, but now has to pay $43 million. The gain of $100 million was based on a fixed cost-per-share of around $30. But according to the data analysis firm, PrivCo, with the loss that Facebook’s stocks are suffering at the market, being down 30% within two weeks, Saverin could actually owe $43 million.
This whole idea of economics and the circulation of money always has some loopholes in which people’s potential monetary gains always goes through to the government’s treasury. Saverin wanted to avoid just that, but being extra smart did not work, because the government is all set with an alternative.
The loophole that Saverin found was that he filed for Singapore’s citizenship in January 2011 and it got approved in September last year. However, even considering these facts does not help his aim. Besides, he has also invested in other startups like Jumio, ShopSavvy, Qwiki, and CrowdMob.