Taxation of Household Savings
This report provides a detailed review of the taxation of household savings in 40 OECD and partner countries. It examines the different approaches that countries take to taxing household savings, and calculates marginal effective tax rates on a wide range of savings vehicles (including bank accounts, bonds, shares, private pensions and housing) to assess the impact of these approaches on savings behaviour. It examines asset holdings across income and wealth distributions to help assess the distributional impact of savings taxation, and discusses recent changes in the exchange of information for tax purposes between tax administrations. It also draws out a range of implications from this analysis for savings tax policy as part of an inclusive growth tax agenda.
Executive summary
Following the 2008 financial and economic crisis, there has been renewed interest in the taxation of household savings as a means of strengthening the efficiency and fairness of countries’ tax systems. Strong calls have come from civil society to increase capital taxation to address income and wealth inequality. Meanwhile, the recent move towards the automatic exchange of financial account information between tax administrations is likely to make it harder for taxpayers to evade tax by hiding income and wealth offshore.