Tax treaties typically result in ________ between the two countries in question.
A) lower property taxes for U.S. citizens overseas
B) elimination of differential tax rates
C) increased double taxation
D) reduced withholding tax rates

Question

Quizplus · Accepted Answer

Tax treaties are agreements between two countries to reduce withholding tax rates on certain types of income earned by residents of one country in the other country. This is done to encourage cross-border trade and investment, and to prevent double taxation. Therefore, the correct option would be reduced withholding tax rates. Options A and C are incorrect because tax treaties do not directly affect property taxes or double taxation, and option B is too vague and could refer to many different types of tax rates.

Tax Treaties Typically Result in ________ Between the Two Countries