Double taxation occurs when the same income is taxed by two different jurisdictions. This often happens when individuals or businesses earn income in one country but are also subject to taxes in their home country. For example, a U.S. citizen working abroad may have to pay taxes both in the country where they earn their income and to the IRS. To alleviate double taxation, many countries have tax treaties that allow taxpayers to receive credits or exemptions. These agreements help ensure that individuals and businesses are not unfairly taxed on the same income, promoting international trade and investment.