Implicațiile cetățeniei în determinarea competenței de impozitare. Limitări aduse suveranității fiscale a statului în cazul cetățenilor săi
The implications of citizenship in determining taxing rights. Limitations on the fiscal sovereignty of the state in relation to its citizens

Summary/Abstract: The earliest and most traditional tax policy of imposing income tax on individuals based on their worldwide income stems from the theory of taxation through exchange. This approach aims to tax individuals based on their political affiliation to a particular state, most often on the basis of citizenship. This connecting factor is inherently linked to the sovereign right of states to tax their citizens and nationals on income, profits, or gains derived from property and assets held in other jurisdictions. The exchange theory in taxation is rooted in the social contract between the state and the individual. The main advantage of using citizenship as a connecting element for determining tax jurisdiction lies in the ease with which it can be applied by tax administrations. Citizenship is an objectively determinable fact, whereas other approaches that rely on an individual’s connection to a state require a factual and circumstantial assessment to establish whether a state has taxing rights over that person. From this perspective, Romanian tax authorities continue to tax Romanian citizens on their worldwide income, despite the fact that such conduct contradicts Romania’s own tax system, which is based on tax residency as the key link between the state and the individual, as well as the principles of international tax law.

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