Rule against foreign revenue enforcement

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The rule against foreign revenue enforcement, often abbreviated to the revenue rule, is a general legal principle that the courts of one country will not enforce the tax laws of another country.^[1][2][3] The rule is part of the conflict of laws rules developed at common law, and forms part of the act of state doctrine.

In State of Colorado v. Harbeck, 133 N.E. 357, 360 (N.Y. 1921) the court referred to

The ... well-settled principle of private international law which precludes one state from acting as a collector of taxes for a sister state and from enforcing its penal or revenue laws as such. The rule is universally recognized that the revenue laws of one state have no force in another.^[4]

In England, Lord Denning MR said in Att-Gen of New Zealand v Ortiz [1984] AC 1 at 20:

No one has ever doubted that our courts will not entertain a suit brought by a foreign sovereign, directly or indirectly, to enforce the penal or revenue laws of that foreign state. We do not sit to collect taxes for another country or to inflict punishments for it.^[5]

The rule has been repeatedly applied in the United Kingdom,^[6] the United States,^[7] Canada,^[8] Australia,^[9] Ireland,^[10] Singapore,^[11] and other countries.^[12][13] It has also been codified into statute in various countries.^[14]