THE EMIGRATION STATISTICS of Finns with significant capital gains are indicative of attempts to avoid capital gains taxes, states Finnwatch.
The Finnish corporate responsibility watchdog examined the capital gains of emigrants and the tax systems of their destination countries in a new report, concluding that the correlation between high capital gains and beneficial tax treatment is a sign of the tax system possibly being a factor in the selection.
It acknowledged, however, that verifying the causal relationship between emigrations and avoiding capital gains taxes would require that the other factors affecting the decision-making process be controlled.
The report examines emigration trends in different wealth brackets in 2014–2018 based on data from Statistics Finland.
It indicates that people with more than 50,000 euros in capital gains are statistically more likely to move to countries where taxes on investment earnings are either not taxed or qualify for partial or full tax exemptions. Only one such country was included on the list of most popular destinations for emigrants with less than 50,000 euros in capital gains.
Portugal, Luxembourg, Singapore and Switzerland were identified as the most likely destinations for people with more than 50,000 euros in capital gains.
Finland, the watchdog demands, should follow in the footsteps of most comparable countries by introducing a tax on the appreciation of assets. The purpose of the tax is to ensure authorities are able to tax increases in value that have taken place in the country also in the eventuality that the taxpayer moves overseas before realising the asset.
A decision on the tax should be made as soon as in the autumn’s budget session, it underlined.
“Finland is losing tax revenues whenever an asset that has accumulated value in the country is realised after a move to a tax haven. Holes in the tax system leave taxpayers in an unequal position and fuel tax competition between countries,” stated Saara Hietanen, a tax policy advisor at Finnwatch.
Aleksi Teivainen – HT
Source: Uusi Suomi
