The report concludes that HNWIs pose significant challenges to tax administrations. The study found that by focussing resources on the HNWI segment, significant improvements in compliance can be achieved.
According to the report, HNWIs present tax administrations with particular challenges: the complexity of their affairs; the amounts of tax revenue potentially at stake; the opportunity to undertake aggressive tax planning ("ATP") and the effect of their compliance behaviour on the overall integrity of the tax system.
The report provides recommendations in the following areas:
- Understanding the risks posed by the HNWI segment and subsets thereof, including the motivations of HNWIs and the wider marketplace for ATP.
- Establishment of an appropriate structure in tax administrations to deal with HNWIs.
- Improving international co-operation at both a strategic and operational level, including the use of regular meetings between heads of HNWI units or other specialists within tax administrations.
- Creation of an appropriate legislative framework targeted at specific aggressive tax planning risks.
- Exploring how the concept of co-operative compliance could be applied to the HNWI segment.