What is a double tax treaty?

Definition

A double tax treaty (also called a double taxation agreement or tax treaty) is a bilateral agreement between two states. It allocates taxing rights over different categories of income so that the same income is not taxed in full by both countries.

What treaties do

• Prevent double taxation — through exemption or a foreign tax credit mechanism.
• Reduce withholding tax — domestic withholding on dividends, interest and royalties is often cut under a treaty.
• Define residency tie-breakers — rules decide which state taxes a person resident in both.
• Enable information exchange — supporting anti-avoidance cooperation.

Why network size matters

A country’s treaty count signals how easily capital and profits can flow in and out without double taxation. Among the jurisdictions on taxesmap.app, Portugal has 78 treaties — a broad European network that lowers effective withholding for cross-border investors and holding structures. The Netherlands and Ireland likewise use extensive treaty networks to support holding-company and financing activity.

Data basis: Government tax authority data via taxesmap.app, as of 2026