Wealth tax: what a new EU study tells us
France's wealth tax, according to Tax Foundation estimates, led to the withdrawal of € 200 billion from the country between 1988 and 2007 and annually reduced GDP growth by about 0.2%. Photo: Victor He / Unsplash.com
The EU is analyzing exactly how states can tax capital, inheritance and even unrealized gains. There is no talk of a pan-European tax, but the EU is studying where it is easier and more efficient to tax capital. One of the main candidates is inheritance and gifts, writes UCL Legal partner Denis Shushin in his Telegram channel "Resident's mistake".
Exit tax and inheritance: how the EU wants to retain capital
The EU has published a large study on wealth taxes: net wealth tax, capital gains, inheritance/gift tax and exit tax.
Not a bill. Not a directive. Not a "single wealth tax in the EU". The authors explicitly write: there is no single model for all countries, they do not propose a specific reform blueprint.
But you can see the direction.
What's important:
- The EU's regular net wealth tax is now essentially live in Spain. Rates are as high as 3.5%, but collections are still modest - about 0.2% of GDP. The wealth is there - the tax base is holey.
- There is no broad annual tax on unrealized capital gains in the EU yet. There are close designs and border regimes like Dutch Box 3, but a full-fledged "revalue assets every year and tax paper gains" has not yet been launched.
- Inheritance and gifts are a much more practical topic. Seventeen EU countries already have such taxes. Against the backdrop of "great wealth transfer" this is an obvious place where rates, exemptions and asset valuation will be tweaked.
- Exit tax is not a theory either. The logic is simple: if the increase in value has accumulated during residency, the move should not automatically nullify the tax rights of the country. In the EU, this has to be packaged carefully because of freedom of movement, hence deferrals, guarantees and other legal plumbing.
Simply put, a wealth tax without registries, bank reporting and international exchange of information usually collects little. With them, it is a different tool altogether.
This article was AI-translated and verified by a human editor
