What Is Tax Treaty? Essential Things To Know About It

A tax treaty, also known as a double tax treaty, is an international agreement aimed at preventing or mitigating the issue of double taxation

Various types of tax treaties include: Bilateral  Multilateral  Regional Comprehensive income tax Limited or special tax Tax Information Exchange Agreements (TIEAs)

Tax treaties play a crucial role in preventing double taxation, promoting cross-border trade investments

These agreements also contribute to the reduction of withholding taxes on cross-border payments, fostering cross-border transactions

Understanding the importance of tax treaties is vital, as they provide clarity and predictability for individuals and companies