Taxing Aliens and International Law: Nationalist China’s Income Tax Negotiations with Treaty Powers, 1935–37

Abstract

This article explores how Chinese international lawyers used international law to assert fiscal sovereignty through income tax reform from 1935 to 1937. Despite Western imperialism preventing China from taxing foreign nationals, Chinese diplomats actively invoked international law to legitimize domestic taxation and challenge entrenched Western privileges within China. Based on diplomatic and public finance archives from Great Britain, China, Germany, and the United States, this article finds that Chinese lawyers systematically approached foreign taxation as a legal issue central to state building. In addition, international law influenced the decision making of treaty powers and foreigners residing in China, evidenced by their engagement with China’s legal arguments. Lastly, international law—particularly fiscal sovereignty doctrines—was ostensibly neutral but imperialist in character, disadvantaging emerging states through requirements they could not meet. This case reveals tensions between domestic reform and international power dynamics relevant to modern debates on global tax justice.