The number of Chinese who became US citizens has declined annually over the last five years to 31,868 in 2012 from 40,017 in 2008, according to the US Department of Homeland Security…
…”I don’t really have the urge to apply for full US citizenship,” Duan said. “I like the freedom I have to travel back and forth between China.”
The IT programmer said he also has been deterred from getting citizenship by frustrated friends whose US citizenship makes buying real estate in China more difficult and also requires them to pay taxes on their overseas businesses.
According to Lin, the Foreign Account Tax Compliance Act, which seeks to curtail offshore tax evasion, is also a factor in the decline of Chinese seeking naturalization.
“It’s a law that’s very well known in the Chinese community,” Lin said. “People are really concerned about the implications.”
Under the new law, US taxpayers holding financial assets abroad must report those assets to the Internal Revenue Service if assets exceed $50,000.
Failure to report those assets may result in a $10,000 to $50,000 penalty..
The law also requires foreign banks and financial entities to find any American account holders and disclose their balances, receipts and withdrawals to the IRS or be subject to a 30 percent withholding tax on income from US financial assets held by the banks or financial entities.