One of Facebook's co-founders has found a way to dodge US taxes – he's renounced his US citizenship.
Billionaire Facebook cofounder Eduardo Saverin is getting rid of his citizenship ahead of the company's IPO at the end of next week. Saverin is the cofounder who got booted from the company back in 2005.
His four per cent stake is worth about $4 billion which means he's going to save a lot of taxes with the move. That's because Facebook is expected to be worth $100 billion after its IPO this month with the company claiming it's already over-subscribed. That's a lot of tax that he avoids.
Singapore, where Saverin lives, does not have a capital gains tax on profits from Facebook's float.
"Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time," said Tom Goodman, a spokesman for Saverin, in an e-mailed statement to Bloomberg.
Saverin doesn't get out of paying tax completely. He will have to pay an exit tax on his holdings, but it will be at Facebook's valuation now, not after the IPO.
Savein is actually one of the most important people's in Facebook's history. In 2003, he agreed to give Mark Zuckerberg $10,000 to fund some sort of project for Harvard students who wanted to put their names, course lists, and pictures online. You know the rest of the story.