A Double Tax Avoidance Agreement (DTAA), also known as a tax treaty, is an agreement signed between two countries to prevent individuals or businesses from being subject to double taxation on their income. The purpose of a DTAA is to allocate taxing rights between the countries involved. It also eliminates or reduces double taxation, promotes cross-border trade and investment, and provides clarity and certainty regarding tax liabilities for taxpayers.

Under a DTAA, the countries agree on various aspects, such as the definition of taxable income, the rules for determining residency and permanent establishment, the rates of taxation, and the mechanisms for resolving tax disputes. These agreements often include provisions for the exchange of information between the tax authorities of the two countries to prevent tax evasion and promote transparency.