TAX MATTERS: Taxes covered under treaties

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TAX treaties are also known as Double Taxation Agreements, referring to bilateral or multilateral international tax agreements between countries with respect to how the respective residents of the jurisdictions should be treated in the respective states. The parties to a tax treaty are referred to as Contracting States.
Double taxation occurs when two states impose a comparable tax on the same taxpayer or when two or more people are taxed on the same income. The former is referred to as juridical double taxation and the latter is called economic double taxation.
Problems of double taxation emerged at dawn of 20th century when taxes became the main source of revenue in many western countries and universally.

Firms in cross boarder business experienced high rates of taxes as a result of tax on both source and residence. With globalisation on the rise mitigating the effects of double taxation has become very important than ever.