A tax treaty is an agreement between two countries allocating taxing rights over cross-border income and providing relief from double taxation. Treaties commonly reduce withholding rates on income types such as royalties, interest and dividends, and set rules for deciding residence.
Why does Tax treaty matter for founders?
Treaty benefits are claimed, not automatic - typically on a W-8 form for US-source income. Not every country has a treaty with the United States, and rates differ by income type, so a rate that applies to royalties may not apply to services.
Where can I read more about Tax treaty?
Note: A plain-English definition for orientation, not legal or tax advice. Rules change - last checked 2026-07-21.