Daniel Bunn President and CEO at Tax Foundation | Twitter Website
Net wealth taxes, which are recurrent levies on an individual's total assets minus liabilities, remain a contentious issue in Europe. These taxes differ from property taxes by encompassing all forms of wealth rather than just real estate. According to an OECD report, such taxes not only generate minimal revenue but also create legal uncertainties and potentially discourage entrepreneurship, thus impacting innovation and long-term economic growth.
Currently, only Norway, Spain, and Switzerland impose a net wealth tax. Other countries like France, Italy, Belgium, and the Netherlands levy taxes on selected assets instead of an individual's net wealth.
Norway's net wealth tax dates back to 1892 and is set at 1 percent for individuals with wealth exceeding NOK 1.7 million (EUR 146,000 or USD 153,000), with higher rates for larger sums. In Spain, the tax is progressive and varies across regions. A "solidarity wealth tax" introduced in 2022 applies additional rates on individuals with assets over EUR 3 million (USD 3.13 million). This tax was extended indefinitely in December 2023.
Switzerland implements its net wealth tax at the cantonal level with varying rates and allowances since its inception in 1840.
France replaced its net wealth tax with a real estate-focused version in 2018. Italy imposes taxes on financial assets held abroad by residents. Belgium has a solidarity tax on securities accounts since 2021. The Netherlands includes certain asset values in income tax calculations but is transitioning to a new system following a Supreme Court ruling that deemed the current method discriminatory.
Cristina Enache compiled this data from sources including EY's "Worldwide Estate and Inheritance Tax Guide 2024" and PwC's "Worldwide Tax Summaries."
