Taxation, Non-Residents, Capital Gains
Designing and enforcing a legal regime for taxing non-residents on capital gains realized from domestic sources is a topic of vital importance for developing countries. The reason is that non-capital-gain income that may be derived from a given country can generally be crystalized in the form of capital gains on the disposition of the income-generating asset. This is true of most important types of income, be it rent, interest, royalty, dividend or business profit. Taxing capital gains, therefore, is invariably needed to ensure that income from assets in the source country is properly subject to tax. In this sense, capital gains taxation of non-residents is inherently a measure for protecting that country’s tax base from erosion.
Wei Cui ,"Taxation of Non-Residents' Capital Gains", in Alexander Trepelkov, Harry Tonino & Dominika Halka, eds, United Nations Handbook on Selected Issues in Protecting the Tax Base of Developing Countries, 2nd ed, (New York: United Nations, 2015) 107.