Agefi: Americans Turn Bulgarians to Avoid Taxes

Americans are giving up their citizenship in order to obtain Bulgarian or Austrian passports, the Swiss financial daily "Agefi" claims.

The grounds for this decision are the unbearable tax burdens in the US, particularly the heritage tax, according to the publication.

The motivation is based on the fact many countries have "discretely" introduced citizenship granting programs based on purely economic principles such as Austria, Saint Kitts and Dominica, while Bulgaria, Singapore, Belgium and Canada also "offer interesting opportunities," Agefi writes.

An American citizen can obtain an European passport (Austrian or Bulgarian) against an investment of between CH 500 000 and 1.5 M. The person in question is not mandated to reside in the country or pay taxes, but has the option to return back to the US after getting a visa and live there all while avoiding the huge heritage tax, the article further informs.

2010 seems to have been a record year by the number of Americans, who have decided to give up their citizenship. The final data is still to be presented, but in the first 3 quarters of 2010, 1 150 US citizens have returned their passports, data from the Treasury Department shows – an unmatched record since 1998.

"Agefi" points out the explanation stems from the fact the US is the only country in the world where taxes are calculated based on citizenship, not on residency – Americans, regardless of where they live around the globe, must pay taxes to the National Revenue Services.