The Exemption of Foreign States from Taxation

Abstract

The problems relating to the exemption from taxes of foreign states and their agencies have lately become more and more intricate. It seems that the new dimensions which this question has assumed are the result of two developments: on the one hand, the ever-growing proliferation of taxes in our times, and on the other hand the intensification and diversification of relations between states. For example, in the past one never inquired whether a foreign state was exempt from the payment of business tax, either because this kind of tax was not imposed or because foreign states did not engage in the sort of activities which attracted the tax. But today these two premises are no longer valid. Business tax in some form is imposed in many countries, and foreign states now indulge in transactions which give rise to the tax.