Tax treaties generally have the effect of increasing the withholding taxes between the countries that are negotiating the treaties.

Question

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Tax treaties generally have the effect of reducing or eliminating the withholding taxes between the countries that are negotiating the treaties. This means that taxes are withheld at a lower rate or not withheld at all on certain types of income, such as dividends, interest, and royalties, that are paid from one country to another. The purpose of tax treaties is to promote cross-border trade and investment by reducing double taxation and providing greater certainty and predictability for taxpayers.

Tax Treaties Generally Have the Effect of Increasing the Withholding