On 16 October 2024 the UN Tax Committee discussed progress in the work on wealth and solidarity taxes. The work of the relevant subcommittee aims to present practical options to assist countries in domestic resource mobilization and in addressing inequalities. Governments could use the revenue raised from taxing wealth to reduce inequality, improving essential services and social safety nets.

Since the previous session of the Tax Committee, the subcommittee has held meetings with Committee members, representatives from national tax authorities, international organizations and academia. Feedback received from the meetings has been used to make progress on the UN Template Law for a Wealth Tax on Individuals, which the subcommittee has now presented for first consideration. The aim of the Template Law is to provide a legal structure to guide lawmakers in drafting the relevant law for their own countries, helping them to evaluate the different approaches available and to select the approach that is most suitable for their country.

The Template Law incorporates best practices from various jurisdictions and identifies important principles and structures governing net wealth taxes in practice. It is also a tool for technical assistance and support for developing countries in capacity building. The Template Law can assist reform, providing a reference for policy makers when preparing new laws or regulations. Policy makers are also recommended to consider the Template Law in conjunction with the UN Tax Committee’s Handbook on Wealth and Solidarity Taxes.

The Template Law contains a Foreword, and a Preamble followed by four Chapters. Chapter 1 on the enabling provisions contains the title, territorial scope and commencement of the law along with definitions. Chapter 2 on the imposition of the wealth tax contains provisions on the tax charge, taxpayer and taxable assets. Chapter 3 on the administration of the law includes provisions on valuation, confidentiality and penalties; and Chapter 4 on special rules sets out a general anti-avoidance rule as well as provisions dealing with trusts and similar arrangements. The chapter also covers the information gathering powers of the tax administration in relation to the wealth tax.

An important consideration for jurisdictions introducing a wealth tax is likely to be the interaction of the new tax with existing tax laws. The Template Law therefore notes that jurisdictions may consider including a specific article to deal with the relationship of the wealth tax and other taxes in the domestic tax system in order to prevent unforeseen issues such as confiscation or double taxation, or to ensure other objectives, such as minimum or maximum effective taxation, in combination with the income tax. The template does not provide a model for the interaction of taxes, as types of tax in each country are very diverse in nature.