3.1.3.2.3 Objective tax exemptions

Objective tax exemptions are exemptions attached to certain types of property and are justified by several policies of the states.1 Furthermore, they are mostly territorial, i.e. available for domestic assets. A state may deny, for instance, the granting of an exemption concerning the inheritance of the deceased’s primary residence on the grounds of the beneficiaries’ foreign nationality. On the contrary, if the beneficiaries had been nationals of the state where the primary residence is located, the inheritance of such residence would have been tax-exempt or assessed at a lower amount. The beneficiaries’ foreign nationality is the cross-border element of this example.