Tax Treaties Defines: that many countries have agreed with other countries in treaties to limit taxation (tax treaties). Tax Treaties may cover income taxes, inheritance taxes, value added taxes, or other taxes. Countries of the European Union (EU) have also entered into a multilateral agreement with respect to value added taxes under auspices of the EU. Tax treaties tend to reduce taxes of one treaty country for residents of the other treaty country in order to reduce double taxation of the same income. The provisions and goals vary highly; very few tax treaties are alike.