Wealth tax is imposed on all assets. There are 7 only countries in the world that impose wealth tax. Major concerns about the highly unequal distribution of wealth, combined with the need for greater tax revenues in many countries during Covid period, have led to a renewed interest in wealth taxes.
The Origins of Wealth tax goes back to ancient greece, during the times of first money was invented during 600 BC. It was known ‘eisphorá’ levied on very wealth athenians during 400 BC. It was a flat fee, levied only when needed — usually in times of war. In the Islamic world, wealth tax (zakat) is common practice. It is a yearly religious duty, to pay 2.5 percent wealth tax on liquid assets.
Wealth tax is important consideration, cannot be ignored when considering citizenship and residence planning abroad.
According to OECD, the number of OECD countries levying individual net wealth taxes dropped from 12 in 1990 to 4 in 2017. This number slightly pickup to 7 as of 2020, due to Covid and most recently Argentina becoming the latest country to implement millionaire tax to counter Covid effects.
Patrimonio. The tax rate is progressive, from 0.2 to 3.75% of net assets above the threshold of €700,000 after €300,000 primary residence allowance. The exact amount varies between regions.
Norway levies wealth tax of 0.85% of which 0.7% (municipal) and 0.15% (national) on net assets exceeding 1,500,000 kr (approx. US$170,000)
Wealth tax is levied against worldwide assets of Swiss residents, but it is not levied against assets in Switzerland held by non-residents. Most cantons have no wealth tax for individual net worth less than CHF 100,000. Wealth tax levied against net assets with a top rate ranging from 0.13% to 0.94% depending on canton and municipality of residence
The annual (wealth) tax at a rate of 0.15 percent on the value of certain securities accounts of individuals (both Belgian tax residents and nonresidents)
Argentina implemented Covid wealth tax in Dec 2020 to tax millionaires who have assets over 200 million pesos ($2.5m). They pay a progressive rate of up to 3.5% on wealth in Argentina and up to 5.25% on that outside the country.
Wealth tax is levied on savings, property and investments
- 0.58% tax for € 30,361 to € 102,010 of assets,
- 1.34% for € 102,010 to € 1,020,096 and
- 1.68% on any euros of assets above € 1,020,096.
Italy imposes a wealth tax on financial investments in the country. It is charged rate is equal to 0.2% withheld by the bank.
Wealth Tax Revenues
Wealth taxes have largely been unsuccessful in many countries, only accounted for a very small share of tax revenues. Switzerland has always stood out as an exception, with tax revenues from individual net wealth taxes which have been consistently higher than in other countries
Below is a chart that shows wealth tax collected in 2016