A capital gains tax (CGT) is a tax on capital gains, the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale. The most common capital gains are realized from the sale of stocks, bonds, precious metals, and property. Not all countries impose a capital gains tax and most have different rates of taxation for individuals and corporations.
Countries that do not impose a capital gains tax include Bahrain, Barbados, Belize, Cayman Islands, Isle of Man, Jamaica, Sierra Leone, Singapore, and others. In some countries, such as Singapore, professional traders and those who trade frequently are taxed on such profits as a business income.
One conclusion implied by a 1996 study of the state of the EU's internal market is that there has been a deliberate but self-defeating "Dutch-auction" among European countries – designed to attract international investment by reducing taxation on capital to a level lower than all the other countries, thus starving national governments of income and increasing fiscal deficits.