Final answer:
Tax treaties are agreements negotiated to provide guidelines for determining taxation of entities subject to tax in multiple countries, preventing double taxation and reducing tax barriers for international trade and investment.
Step-by-step explanation:
Tax treaties are agreements negotiated between countries concerning the treatment of entities subject to tax in both countries. These treaties are designed to prevent double taxation and provide guidelines for determining which country has the taxing rights over certain types of income. For example, if a multinational company operates in multiple countries, a tax treaty can determine how the profits of that company are taxed in each country. The goal of tax treaties is to promote international trade and investment by providing certainty and reducing tax barriers.