In a surprising move, the U.S. Department of State has significantly decreased the fee for renouncing citizenship by approximately 80%, reducing it from $2,350 to $450.
The new regulation, expected to be effective on April 13, will reduce the cost for Americans, particularly those residing overseas, to officially renounce their citizenship.
Despite being announced in 2023, its implementation has only occurred now. This action reverses a regulation from 2015 that rendered the process of relinquishing US citizenship among the most costly globally.
The fee is now equivalent to what it was in 2010, when the US State Department initially started imposing charges on Americans wishing to formally abandon their citizenship.
The fee was increased to $2,350 in 2015 due to the rise in the number of individuals applying for a Certificate of Loss of Nationality (CLN). According to The Guardian, the Internal Revenue Service said that approximately 4,820 people renounced their citizenship in 2024.
"While there is no legal requirement for individuals to declare their motivation for renouncing US citizenship, anecdotal evidence suggested that difficulties were due at least in part to reporting requirements," the State Department stated.
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A look at process of renouncing US citizenship
{{/usCountry}}Also Read: Can $120,000 savings last for 9 years in India? H-1B visa holder does ‘impressive’ calculation
A look at process of renouncing US citizenship
{{/usCountry}}Despite the reduced fee, the act of renouncing U.S. citizenship continues to be intricate and lengthy.
Applicants are required to:
- Attend in person at a U.S. embassy or consulate
- Fulfill several written and verbal confirmations
- Take a formal oath of renunciation
- Await final approval and the issuance of a Certificate of Loss of Nationality (CLN)
The duration of the process may extend to several months or more, contingent upon the availability of appointments at U.S. consulates and embassies.
Reasons behind the surge in US citizenship renunciations
In recent years, there has been a notable surge in the number of Americans choosing to renounce their citizenship. According to a Boundless report on U.S. citizenship renunciations, the annual figures have surged from merely a few hundred before 2009 to over 5,000 in several recent years.
The primary factors contributing to this trend include:
- Complicated U.S. tax reporting requirements for citizens residing abroad
- Financial and banking limitations imposed by other nations
- Personal or political motivations
U.S. citizens are obligated to submit annual tax returns, irrespective of their place of residence. This requirement poses ongoing compliance difficulties for many, particularly for those identified as accidental Americans.