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Comment by toast0 | Hacker News Reader

From the article you linked in that comment[1], it seems like this exit tax only applied to companies where you own 1% or more? and it's structured as the capital gains tax, but due now, so on the current value minus your cost basis.

The US has an exit tax if you renounce citizenship, and it's assessed on your entire net worth. If the article you linked is accurate, this german tax seems much more reasonable.

EDIT: actually, I reviewed, and I think it's broadly similar --- treat all assets as if sold at market value on the date of exit. Thus, any deferred taxes from unrealized capital gains need to be paid when you exit the taxing jurisdiction. Although, again, if the linked article is correct, it only happens to assets where you own >= 1% of the company when exiting Germany, and all capital assets if you qualify in the US.

[1] https://www.winheller.com/en/tax-law-tax-advisory/internatio...

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isn't comparing it to an even worse jurisdiction like US a bit unfair? why not compare it to other EU countries or even Asia. I'm not a US citizen but being taxed on my global income would be a pretty strong reason to renounce my citizenship.

For what it's worth Japan also has a nasty exit tax.

> strong reason

But not allowed!

"If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act"

how are you comparing renouncing citizenship with temporarily leaving the country

I'm comparing 'exit taxes'. But also if you leave Germany, you're no longer subject to German income tax, and you have to both leave the US and renounce citizenship to become no longer subject to US income tax.

I updated my comment to improve its clarity. I can see how it was unclear to you.

I think the wording was unclear as that's what I thought too, that "leaving" meant for good, and maybe there was a way back - hence the temporary part.

A tax on simply exiting the country is a very foreign concept to Americans I would assume.

Hah! Americans have to file US tax whether they live in the US or not.

Only for higher income individuals. We get a Foreign Tax Credit for taxes already paid where we live/work.

Looks like the limit last year was $120k. Only 17% of Americans make more than $100k/year. Only ~5million Americans living abroad, or 1.5% of the population.

I'm sure those numbers are correlated, but I'll bet its under a few hundred thousand of people who are burdened with the tax. Even then, the benefits also are pretty nice.

No, all Americans who make money abroad have to file taxes. Yes, there is the Credit and the Exclusion, which will often reduce your burden to often zero but still requires all the paperwork.

Try owning a stake in a foreign company (CFC) though, that's a nightmare with often unavoidable significant taxes.

As someone who is burdened with several thousands in filing costs every year (not tax, I mean the cost of paying an accountant to deal with the filing, which is required for all US citizens), because I have a non-US business, please fill me in on the benefits.

Also more and more non-US banks won't take US citizens as customers because they don't want to deal with the US's FATCA requirements.

No other developed country has these sorts of requirements for non-resident citizens.

Most are burdened not so much by the tax itself , but by the complex and costly tax report that should be filed every year.

This rule has been changed in 2006, see the wikipedia entry. Also the double tax rule allows you to tax the win in the target country and not Germany.

It was also changed in 2021, and subsequent rulings that affect it earlier this year. The Wikipedia article is out of touch with more recent developments.

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