Saturday, January 12, 2013


French actor Gerard Depardieu’s decision to renounce his citizenship in order to avoid paying taxes might be tempting to those moving into ever high brackets. But experts warn that making such an exit is often a complex and costly process.

Last weekend, Russian President Vladimir Putin granted Russian citizenship to Depardieu, who abandoned France after a bitter exchange over the government’s plans — stifled so far — to hike the top income tax bracket rate from a 46.7% ceiling, according to the OECD, to 75% for those who earn more than $1.3 million a year. He chose Russia, which has a flat tax rate of 13%, and where he is already a well-known figure. And Depardieu isn’t the first celebrity to pledge allegiance to a foreign flag. In 2012, billionaire Facebook co-founder Eduardo Saverin became a permanent resident of Singapore, although his spokesman at the time he was not motivated by tax rates.
The top rate of U.S. income tax is relatively high by international standards. As of Jan. 1, the 35% top rate of income tax increased to 39.6% for individuals with at least $400,000 of taxable income or couples with at least $450,000. Most countries fall comfortably below that rate. The exception: Western Europe. With an average top rate of 46%, it has the highest personal tax rates in the world, according to a 2012 survey by accounting giant KPMG. And plans by France to raise its top rate of income tax could obviously raise that average further.  (more)

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