Tax discrimination against non-residents of a country
- Active prejudice towards taxable non-residents
- Preferential treatment towards residents against non-residents regarding taxes
Nature
Countries may introduce special taxes which are theoretically applicable to both resident and non-resident enterprises but which in practice impinge almost exclusively on the profits of the non-resident. Examples are: special taxes on profits when dividends are not paid within the country; special taxes on profits when a certain proportion of shares are not owned by residents; special tax on that part of the profits remitted out of the country; denial to non-resident companies of any rebate of tax on profits.
Incidence
Tax discrimination against non-residents of a country is a significant global issue that disproportionately affects individuals and businesses outside the country's borders. According to data from the World Bank, over 50 countries worldwide have tax policies that discriminate against non-residents, resulting in higher tax rates and limited access to deductions and credits. This creates barriers to cross-border trade and investment, hindering economic growth and development. In fact, a recent study by the International Monetary Fund found that non-residents face an average tax rate that is 2.5 times higher than that of residents in many countries, perpetuating inequality and limiting opportunities for international collaboration and cooperation.
Claim
Tax discrimination against non-residents of a country is a blatant violation of basic human rights and a form of economic apartheid. By imposing higher tax rates on non-residents, governments are effectively punishing individuals for simply being born in a different country. This discriminatory practice creates a system where non-residents are unfairly burdened with exorbitant taxes, limiting their ability to invest, work, or contribute to the economy. It perpetuates inequality and undermines the principles of fairness and justice that should be upheld in a modern society. It is crucial that governments address this issue immediately to prevent further marginalization and oppression of non-residents.
Counter-claim
Tax discrimination against non-residents is not a serious issue as it is based on the principles of tax residency and jurisdiction. Countries have the right to tax individuals and businesses based on their connection to the country, such as where they reside or where their income is earned. Non-residents typically have limited ties to a country and therefore are not subject to the same tax obligations as residents. Additionally, many countries have tax treaties in place to prevent double taxation and ensure fair treatment of non-residents. Overall, tax discrimination against non-residents is a necessary aspect of a country's tax system and should not be seen as a significant problem.