Tax treaties are agreements between two or more countries that aim to prevent double taxation and fiscal evasion. They establish rules on how income earned in one country by a resident of another country is taxed. This helps individuals and businesses avoid being taxed on the same income in both countries. These treaties typically cover various types of income, such as dividends, interest, and royalties. By clarifying tax obligations, tax treaties encourage international trade and investment, making it easier for individuals and companies to operate across borders without facing excessive tax burdens.