Rule against Foreign Revenue Enforcement

The rule against foreign revenue enforcement, also known as the revenue rule, is a legal principle that restricts the ability of one country's courts to enforce or assist in the collection of revenue claims or tax judgments from another country. It recognises the sovereignty and independence of each nation's tax system and aims to prevent the inappropriate intrusion of one country's tax authority into the affairs of another.

The rule against foreign revenue enforcement is rooted in the principles of international law and comity between nations. It acknowledges that each country has the right to establish its own tax laws and procedures and that the enforcement of tax claims should generally be confined within the borders of that country.

Under this rule, a court in one country will generally decline to enforce or assist in the enforcement of a foreign revenue claim or tax judgment. This means that tax authorities seeking to collect taxes or enforce judgments in a foreign jurisdiction must typically rely on the domestic laws and procedures of that jurisdiction.

The rule against foreign revenue enforcement helps maintain respect for national sovereignty, promote international cooperation, and prevent potential conflicts arising from the extraterritorial application of tax laws. It recognises the importance of respecting the jurisdictional boundaries and autonomy of each country's tax system while encouraging collaboration and mutual assistance in appropriate circumstances, such as through tax treaties or international agreements.