What is the tax treatment of a non qualified annuity?

What is the tax treatment of a non qualified annuity?
Please clarify what country you are talking about. Different countries have different tax laws.

Taxation rules for a nonqualified annuity owned by individuals subject to United States tax jurisdiction are contained in Internal Revenue Service Publication 17.

A nonqualified annuity is funded with after tax dollars and accordingly the tax basis for all contributions is zero. Any contract gains made above the tax basis are generally taxed at ordinary income tax rates.

The primary advantage of a nonqualified annuity is the benefit of allowing savings to grow on a tax deferred basis. In an ordinary savings or stock account all realized capital gains, dividends, and interest are taxed on a yearly basis. In a nonqualfied annuity account gains can compound tax free over time until funds are withdrawn.

Different tax rules apply depending on whether the annuity holder takes a withdrawal or an annuitization payment.
When a withdrawal is made from a nonqualified annuity gains are considered to be distributed first and will be fully taxable. For example, an individual holding a nonqualified annuity with an account balance of $200,000 consisting of $150,000 of after tax contributions and $50,000 in gains would owe ordinary income tax on $50,000 of a $70,000 withdrawal. The remaining $20,000 would be tax free since it represents part of the cost basis comprised of after tax contributions.
When an owner of a nonqualfied annuity chooses to receive annuity payments each year part of the payment will be comprised of a tax-free return of his basis and part taxable gain. The rules can become very complex and exceptions to the general rule cited above exist for contracts issued prior to August 14, 1982.

In addition to possible taxation of withdrawals a penalty tax of 10% is assessed on money withdrawn before the age of 59 1/2.
If the account owner dies with gains in the nonqualified annuity the beneficiary will inherit the tax basis of the decedent and owe ordinary income taxes on the distribution of any gains.