Facebook co-founder Saverin may avoid $67 million in U.S. taxes
(CBS News) Eduardo Saverin made headlines last week, after it was discovered that the Facebook co-founder relinquished his U.S. citizenship to become a resident of Singapore. Saverin was born in Brazil, moved to the U.S. in 1992 and became a citizen in 1998.
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Singapore does not have capital gains taxes, which many have speculated is part of the reason for Saverin's timely move. The citizenship swap took place last September, Saverin's spokesman Tom Goodman told Bloomberg.
Facebook may make history with what could be the largest Internet initial public offering (IPO) in history on Friday. The company could raise an estimated $16 billion, which would enlarge Saverin's cut of the pie.
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According to Bloomberg analysis, Saverin could save $67 million in U.S. taxes by trading in his citizenship ahead of Facebook's IPO. That number is based on a 15 percent U.S. capital gains tax rate applied to Saverin's potential earnings. Saverin's stake could be worth $2.89 billion.
Saverin won't avoid all U.S. taxes, however.
"According to Reuven Avi-Yonah, head of the international tax program at the University of Michigan, Americans who give up their citizenship still owe a sort of exit tax on the capital gains from their stock portfolios, whether they've sold shares or not," CNET reported.
Saverin helped Mark Zuckerberg launch Facebook in 2004.
