US citizens have a cause to rejoice, their home country is proposing to significantly reduce the hefty 2.350 dollar fee that comes with renouncing citizenship.

US mulls changing citizenship renunciation fee

Already hinted at back in January 2023, the US government has now announced that it will take further steps to reduce the 2.350-dollar fee that citizenship holders have to pay to renounce their status to 450 dollars.

The fee was originally raised from 450 dollars back in 2014 and since then, the government wrote in its announcement, "Members of the public have continued to raise concerns about the cost of the fee and the impact [it has] on their ability to renounce their citizenship”.

The change has not yet been set in stone and a proposed date for implementation also remains unknown, but the US State Department made it known that it is interested to receive comment on the matter before a final ruling is issued. Members of the public who would like to submit a comment on the proposition can do so until November 1, 2023 by emailing [email protected] and referencing the RIN number 1400-AF61 or posting here.

Why do people abroad want to renounce their US citizenship?

One of the main reasons why the proposed change would be so welcomed by US citizens abroad is because the US is one of only two countries in the world where people are taxed based on their citizenship rather than where they are working and earning. 

This has been the case since the FACT Act was introduced in 2010, which ruled that anyone with a US passport must submit a tax declaration to the IRS even if they work outside the US exclusively.

The introduction of FACTA saw an increase in the number of people looking to cut ties with the US, especially self-proclaimed "Accidental Americans", those who were granted citizenship by virtue of being born in the States but who have never lived there in their adult lives.

For US citizens living in Germany long term; who may have paid 2.350 US dollars to sacrifice their US citizenship for a German passport that would grant them more rights and better security in their adopted country, the proposal could have come a little earlier. If the new regulation is adopted swiftly, which is expected, it will mostly benefit those who want to avoid the annual inconvenience of submitting their US taxes, since it could be introduced just as Germany starts allowing residents to apply for dual German citizenship without having to renounce their original passport.

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