Skip to main content
For Rnor, Nri, Income Earned Abroad Is Not Taxable In India | Mint
Tax Notes International, p. 705-706 (May 2, 2022)

Group Insists Residency-Based Taxation Can Be Revenue Neutral by Andrew Velarde
"American Citizens Abroad (ACA), which has championed a move to residency-based taxation (RBT) for U.S. citizens for years, insists that such a pivot can be made revenue neutral and is touting a new study to support its claim.
ACA issued a release on April 25 announcing the results of its 10-month study based on analysis by District Economics Group as well as a side-by-side analysis of current law and a potential RBT approach.
'Long-term American residents abroad could seamlessly move from citizenship-based taxation, the current set of rules, to RBT. No one would be forced to do this. No one would be made worse off, as the existing foreign earned income exclusion rules would remain for those wishing to use them,' the release states.

For years, the ACA has pushed for the shift in how U.S. citizens living abroad are subject to taxation, removing foreign income from the pool that is subject to U.S. tax, and have asserted that finding a revenue-neutral path away from citizenship-based taxation is key. This is the second study ACA has conducted. It revises a model developed in 2017-2018 by expanding the number of countries, accounting for the Tax Cuts and Jobs Act and the pandemic, and incorporating changes to income estimates based on numbers from the IRS and Federal Reserve Board. ACA anticipates presenting the study’s results to congressional staff and Treasury."