A Double Taxation Agreement (DTA) is a treaty between two countries that aims to prevent individuals and businesses from being taxed on the same income in both jurisdictions. These agreements help clarify 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. They typically include provisions for tax credits or exemptions, allowing taxpayers to offset taxes paid in one country against their tax liabilities in another, fostering a more favorable environment for economic cooperation.