National Treatment


DEFINITION of 'National Treatment'

A concept of international law that declares if a state provides certain rights and privileges to its own citizens, it also should provide equivalent rights and privileges to foreigners who are currently in the country. This concept of equality can be found in bilateral tax treaties and also in most World Trade Organization agreements.

BREAKING DOWN 'National Treatment'

For example, if country A provides special tax breaks for its fledgling pharmaceutical industry, all pharmaceutical companies that have operations in country A will be entitled to the tax breaks, regardless of whether the company is domestic or foreign.

In some situations, national treatment may not be such a great thing. For instance, suppose that a state has a law that allows it to expropriate property. Under national treatment, a foreign firm would technically still be subject to the expropriation law. However, depending on the country, other laws may exists that could limit national treatment to only the upside benefits.

  1. Taxes

    An involuntary fee levied on corporations or individuals that ...
  2. World Trade Organization - WTO

    An international organization dealing with the global rules of ...
  3. Foreign

    1. A non-U.S. company with securities trading on the North American ...
  4. General Agreement On Tariffs And ...

    A treaty created following the conclusion of World War II. The ...
  5. Organization for Economic Cooperation ...

    A group of 30 member countries that discuss and develop economic ...
  6. Expropriation

    The act of taking of privately owned property by a government ...
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  3. Can the IRS audit you after a refund?

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  4. How does escheatment impact a company?

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  5. What happens if property is wrongfully escheated?

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