Double tax agreement between two countries aims to provide relief to taxpayers who are subject to taxation in both countries. This agreement is significant for individuals, as well as businesses, who have a presence in both countries.

The primary objective of a double tax agreement (DTA) is to eliminate the possibility of double taxation. Double taxation happens when a person or a company is taxed twice for the same income in two different countries. This can result in an unfair financial burden, which is why the DTA is so important.

DTAs typically outline the taxes covered by the agreement and the methods used to eliminate double taxation. The document also defines the criteria for residency and the provision for mutual assistance between the two countries` tax authorities.

A DTA can be beneficial for those who work or do business in another country. For example, a person who works in a country that taxes income at a higher rate than their home country may end up paying more tax. However, the DTA may provide relief by allowing the person to claim a credit for the tax paid abroad.

DTAs also provide clarity and transparency, making it easier for businesses to plan their cross-border transactions. It helps ensure that businesses do not engage in tax evasion and makes it easier to resolve disputes between the two countries.

In conclusion, a double tax agreement between two countries aims to provide relief to taxpayers who are subject to taxation in both countries. It eliminates the possibility of double taxation by defining the taxes covered by the agreement and outlining the methods used to eliminate double taxation. DTAs can be beneficial for individuals and businesses that work or do business in another country, providing clarity, transparency, and easier dispute resolution. As such, they are an essential tool for international trade and investment.