How do governments assess and collect taxes on the income of non-residents?

Governments assess and collect taxes on the income of non-residents using a variety of methods. Generally, two types of taxes are collected: domestic and international. In Georgia, domestic taxation is collected on income earned within the country by both residents and non-residents alike. This includes income from wages, capital gains, and profits on investments. International taxation, however, is more complex and is imposed on foreign income earned by non-residents outside of Georgia. The government uses a variety of methods to collect international taxation from non-residents, including withholding taxes and tax treaties. The government can require the non-resident’s employer to withhold a certain percentage of his or her income to be sent to the government as payment of taxes. Alternatively, tax treaties between countries can determine how taxes are collected on income earned by non-residents, and the government can use this framework to collect taxes. The government can also impose a form of international taxation known as export taxes. This is usually a flat rate applied to certain products or services purchased by non-residents. Finally, the government can charge value-added tax (VAT) on goods and services purchased by non-residents. This type of tax is calculated based on the value of the goods or services purchased. All of these methods are used by the Georgian government to assess and collect taxes on the income of non-residents.

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How do governments assess and collect taxes on the income of non-residents?

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