DOUBLE TAXATION AVOIDANCE AGREEMENTS (DTAAS)

Benefits of a Double Taxation Avoidance Agreement (DTAA):

• Avoids double taxation - A Double Taxation Avoidance Agreement ensures that the same income is not taxed in two countries. This removes a tax barrier for businesses and individuals who earn income in different countries.
• Reduces withholding tax rates - DTAAs often reduce the withholding tax rates levied on incomes like dividends, interest, royalties arising from cross-border transactions. This improves cash flows for businesses.
• Tax treaty benefits - DTAA provides treaty benefits like lower tax rates, capital gains tax exemptions that may not be available under domestic tax laws. This encourages foreign investment. 
• Tax residency rules - The tie-breaker rules of a DTAA determine residence of dual residents. This provides certainty on which country can tax specific income.
• Exchange of information - DTAA allows exchange of information between tax authorities to prevent tax evasion. This is beneficial for preventing tax leakage.
• Non-discrimination - The non-discrimination clause ensures foreign taxpayers cannot be taxed more than domestic taxpayers. This provides a level playing field.
• Dispute resolution - Double Taxation Avoidance Agreement provides mechanisms like Mutual Agreement Procedure for resolving disputes related to taxes covered under the agreement.
• Certainty and stability - DTAA provides stability regarding taxation of cross-border transactions and investments for the long term. This enables better financial planning.

In summary, Double Taxation Avoidance Agreements prevent double taxation, reduce tax costs, provide treaty benefits, certainty and transparency - all of which encourage trade and investment between countries.