Cooperative Compliance Program for Individuals and Trusts: A Proposal for a Compliance Passport
6 Journal of Tax Administration 33 (2021)
27 Pages Posted: 5 Nov 2020 Last revised: 30 Jun 2021
Date Written: September 1, 2020
Ensuring tax compliance among business and wealth owners is an important policy goal for many tax authorities. This article develops a proposal for a voluntary program for individuals, family trusts and private investment vehicles which draws upon existing cooperative compliance programs for large corporations, such as the OECD’s International Compliance Assurance Programme (ICAP). Under the proposed program, the authorities of the relevant jurisdictions would determine, on a joint basis, whether the participant is in full compliance with their tax obligations and whether there are any money laundering concerns. The implementation of this proposal could enhance a culture of cooperative compliance and free up enforcement resources. For participants, it could improve privacy, increase certainty, and reduce compliance costs and distortions. As this proposal has the potential to ensure compliance while reducing costs and risks for both tax authorities and taxpayers, it deserves serious consideration.
Keywords: Cooperative Compliance, ICAP, Trusts, High-Net-Worth Individuals, Tax Administration, AML
JEL Classification: K34
Suggested Citation: Suggested Citation