ACA Advocates For Adoption Of Residency-Based Taxation (RBT)

ACA advocates for the adoption of Residency-based Taxation (RBT) and supports advancing Congressman Holding's legislation, Tax Fairness for Americans Abroad Act of 2018 (TFAA), which was introduced in December of 2018.  The Tax Fairness for Americans Abroad Act of 2018 proposes taxing US citizens resident abroad solely on their US sourced income and not on their foreign earned income.  The legislation is a residency-based approach to taxation, sometimes referred to as territorial.  

ACA was the first organization to create a baseline or "vanilla" approach to how taxing US Citizens overseas based on residency might be structured. In order to promote a constructive consideration of the subject, ACA provided a Written Description and a Side-by-Side Comparison indicating the current tax code, offen referred to as Citizenship-based taxation or CBT, compared with details of ACA's RBT approach.  

This baseline approach to RBT was intended to lay out a version that captures the essential elements of residency-based tax treatment and examine and modify these to arrive at an optimal RBT approach, one that meets the needs of the community while addressing the concerns over abuse and potential loopholes.