What is a treaty for the avoidance of double taxation (tax treaty)?

A tax treaty is an agreement between two countries stipulating which country has which levying rights in respect of a particular income. This prevents a person from being taxed twice (by two countries) on the same income. The content of a tax treaty differs per bilateral situation and thus the precise tax consequences can only be determined by consulting the relevant bilateral tax treaty. Most tax treaties provide for a mitigated withholding tax on dividend and interest income.