DOUBLE TAXATION AVOIDANCE AGREEMENTS (DTAAS)
20 Oct 2023 3 mins Download PDF
- It is a mutually consented upon agreement between two countries on the taxability of specified incomes which both countries claim to have the right to levy tax on.
- Most countries have DTAAs to overcome the issue of double taxation arising due to cross border incomes.
- It is also aimed to promote international trade and amplify economic relations.
- DTAAs ensures that the same income is not taxed more than once by different territories.
- It ensures that prevention of tax evasion and tax avoidance.
Benefits of a Double Taxation Avoidance Agreement (DTAA):
In summary, Double Taxation Avoidance Agreements prevent double taxation, reduce tax costs, provide treaty benefits, certainty and transparency - all of which encourage trade and investment between countries. |
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