Engaging with High Net Worth Individuals on Tax Compliance
High Net Worth Individuals (HNWIs) pose significant challenges to tax administrations
due to the complexity of their affairs, their revenue contribution, the opportunity
for aggressive tax planning, and the impact of their compliance behaviour on the integrity
of the tax system. This publication examines in detail this taxpayer segment, describes
their usage of aggressive tax planning schemes and proposes prevention, detection
and response strategies that tax administrations can use to respond to these challenges.
It also addresses aspects of voluntary disclosure initiatives for past non-compliance
that may be particularly pertinent in the current environment.
The publication outlines a number of innovative approaches to enable governments to
better manage the risks involved with marketed tax schemes and tailor-made arrangements.
To improve compliance, tax administrations could consider changing the structure of
their operations to focus resources effectively, for example, through the creation
of a dedicated HNWI unit. Other recommendations include creating the appropriate legal
framework, exploring forms of co-operative compliance and engaging more in international
co-operation, at both the strategic and operational level.
Published on September 09, 2009