A Double Taxation Agreement (DTA) is a treaty between two countries that aims to prevent individuals and businesses from being taxed twice on the same income. This agreement clarifies which country has the right to tax specific types of income, such as wages, dividends, and royalties, thereby reducing the overall tax burden for taxpayers engaged in cross-border activities. DTAs promote international trade and investment by providing tax certainty and reducing the risk of double taxation. Countries like the United States and the United Kingdom often enter into these agreements to encourage economic cooperation and protect their residents from excessive taxation when earning income abroad.