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The Occupying Power may use tax revenue to defray the costs of maintaining order in theoccupied territory or for expenditures that benefit the local population (e.g., infrastructureimprovements). 424The Occupying Power may refrain from spending money for the support of any activityopposed to its military interests or to the restoration of order in the occupied territory, even if theState whose territory is occupied formerly allocated tax revenues to such activity. 42511.22.1.4 Exemption of the Occupying Power From Local Taxation. As theparamount authority in the occupied territory, 426 the Occupying Power is exempt fromindigenous taxation in the occupied territory unless it specifically waives its sovereign immunityand consents to be taxed. 427 Its personnel are also generally exempt from local taxation, as partof their immunity from local law. 428In practice, the Occupying Power often issues an order specifying that no direct taxes ofany kind may be levied or assessed within the occupied territory on the persons, agencies,property, instrumentalities, or transactions of the Occupying Power. 42911.22.1.5 Scope of the Occupying Power’s Power to Collect Taxes. The power ofthe Occupying Power to collect taxes extends only to persons or property under its actualcontrol. 430 For example, persons and property wholly outside occupied territory generally may424 See also VON GLAHN, THE OCCUPATION OF ENEMY TERRITORY 151 (“It should be pointed out in this connectionthat as long as it is a duty of the occupant to restore order and public safety in the territory, the expenditures incurredby him as administrator for the benefit of the territory and its inhabitants should be paid for by the beneficiaries.This appears to be particularly true in the case of capital expenditures. Normally an occupant would be unwilling topermit heavy capital outlays in occupied enemy territory (such as the construction of dams, power stations, canals,and public buildings), but if, in rare instances, permission would be granted for such extraordinary outlays over andabove normal operating expenses of the native administration, then the necessary funds should come from anyexcess revenues collected by the indigenous agencies, not from the occupant’s own reserves.”).425 VON GLAHN, THE OCCUPATION OF ENEMY TERRITORY 150 (“Obviously no occupant need spend money for thesupport of any activity opposed to his military interests or to the restoration of order in the area, even if the absentlegitimate sovereign formerly allocated tax revenues to such activity.”).426 Refer to § 11.8.1 (Paramount Authority of the Occupying Power Over Government Functions in OccupiedTerritory).427 VON GLAHN, THE OCCUPATION OF ENEMY TERRITORY 153-54 (“[A]n occupant is virtually exempt fromindigenous taxation in an occupied territory unless he takes the rather unlikely step of waiving his sovereignimmunity and consents to be taxed. In actual practice the occupation authorities normally issue an order to theeffect that no direct taxes of any kind may be levied within the occupied area on the persons, agencies, or propertyof the armed forces of the invader and that no direct taxes may be assessed against the property, instrumentalities ortransactions of the occupying authorities themselves.”).428 Refer to § 11.8.5 (Immunity of Occupation Personnel From Local Law).429 For example, Coalition Provisional Authority Order No. 17, Status of the Coalition Provisional Authority, MNF-Iraq, Certain Missions and Personnel in Iraq, §10(1) (Jun. 27, 2004) (“The MNF, Sending States and Contractorsshall be exempt from general sales taxes, Value Added Tax (VAT), and any similar taxes in respect of all localpurchases for official use or for the performance of Contracts in Iraq.”).430 J.A.G.S. TEXT NO. 11, LAW OF BELLIGERENT OCCUPATION 197 (“It must be remembered that the power of theoccupant to collect taxes is purely de facto and territorial, i.e., it extends only to persons or property under his actualcontrol.”).810