Tax treaties typically result in reduced withholding tax rates between the two signatory countries.

Question

Quizplus · Accepted Answer

Tax treaties are negotiated between two countries in order to avoid double taxation of the same income. One of the main benefits of a tax treaty is the reduction of withholding tax rates on certain types of income, such as dividends, interest, and royalties, which makes cross-border investments more attractive to investors. Therefore, the statement is true.

Tax Treaties Typically Result in Reduced Withholding Tax Rates Between